- Subject index
Interest in economics is at an all-time high. Among the challenges facing the nation is an economy with rapidly rising unemployment, failures of major businesses and industries, and continued dependence on oil with its wildly fluctuating price. Economists have dealt with such questions for generations, but they have taken on new meaning and significance.Tackling these questions and encompassing analysis of traditional economic theory and topics as well as those that economists have only more recently addressed, 21st Century Economics: A Reference Handbook is a must-have reference resource.Key FeaturesProvides highly readable summaries of theory and models in key areas of micro and macroeconomics, helpful for students trying to get a "big picture" sense of the fieldIncludes introductions to relevant theory as well as empirical evidence, useful for readers interested in learning about economic analysis of an issue as well for students embarking on research projectsFeatures chapters focused on cutting-edge topics with appeal for economists seeking to learn about extensions of analysis into new areas as well as new approaches Presents models in graphical format and summarizes empirical evidence in ways that do not require much background in statistics or econometrics, so as to maximize accessibility to students.
Chapter 8: Consumer Behavior
The demand curve is one half of the familiar supply-and-demand graph that determines price and quantity exchanged in a perfectly competitive goods market. This curve shows the relationship between the price of a commodity and the quantity that buyers are willing to buy at each given price, holding all other factors constant. The shape of the curve, as well as how it shifts when various other factors do change, is explained by the theory of consumer behavior. The most important aspect of consumer theory is its conclusion that (in almost all circumstances) the demand curve for a commodity is downward sloping. This relationship is the familiar “law of demand” first articulated directly by Alfred Marshall (1842–1924) in his Principles of Economics (Marshall, ...