Theory of Consumer Choice and Frontiers of Microeconomics

Scenario: You have been asked to assist your organization’s marketing department to better understand how consumers make economic decisions.

Write a 1,050-word analysis including the following:

The impact the theory of consumer choice has on:
Demand curves
Higher wages
Higher interest rates
The role asymmetric information has in many economic transactions.
The Condorcet Paradox and Arrow’s Impossibility Theorem in the political economy.
People are not rational in behavior economics.
Cite a minimum of three peer-reviewed sources not including your textbook.

Format your paper consistent with APA 7th edition guidelines.

Solution Preview

The theory of consumer choice believes in the budget constraint of the consumer as well as how well good fit their utility. There are different ways in which this theory can affect demand curves. The demand curve normally displays the quantity demand as being less during higher prices of products which establish the inverse relationship between a products price and its demand regarding quantity. A diminishing marginal utility can affect the curve so that it slopes downwards.

(1,184 words)