Section 2
Theory of Consumer Choice
By Boundless
![Thumbnail](../../../../../../figures.boundless-cdn.com/20229/raw/budget-constraint.jpg)
Budget constraints represent the plausible combinations of products and services a buyer can purchase with the available capital on hand.
![Thumbnail](../../../../../../figures.boundless-cdn.com/20259/raw/curves-perfect-substitutes.jpg)
Economists mapping consumer preferences use indifference curves to illustrate a series of goods that represent equivalent utility.
Almost all indifference curves will be negatively sloped, convex, and will not intersect.
![Thumbnail](../../../../../../figures.boundless-cdn.com/20293/raw/me-consumption-curve-graph.jpg)
One of the central considerations for a consumer's consumption choice is income or wage levels, and thus their budgetary constraints.
![Thumbnail](../../../../../../figures.boundless-cdn.com/20339/raw/supply-and-demand.jpg)
The demand curve shows how consumer choices respond to changes in price.
![Thumbnail](../../../../../../figures.boundless-cdn.com/20337/square/demand2b.jpeg)
The law of demand pursues the derivation of a demand curve for a given product that benchmarks the relative prices and quantities desired.
![Thumbnail](../../../../../../figures.boundless-cdn.com/20289/raw/labour-supply.jpg)
The income effect and substitution effect combine to create a labor supply curve to represent the consumer trade-off of leisure and work.