What drives consumer choices?
— Consumer choices are driven by preferences and utility functions, which consider both preferences and budget constraints.
What are indifference curves?
— Indifference curves are graphical maps of preferences that represent people's choices between buying pizza or eating cookies with their money.
What is the concept of diminishing marginal utility?
— Diminishing marginal utility means that the more of a good you have, the less happiness you derive from the next unit.
How are preferences represented graphically?
— Preferences are represented graphically through indifference curves, which show all combinations of consumption among which an individual is indifferent.
Why are larger sizes of goods often offered at a lower price per unit?
— The price of a good reflects diminishing marginal utility, where the first unit is worth more than subsequent units, leading to a lower demand for additional units and lower prices for larger sizes.
We’ve got the additional info