# Consumer Behavior

## Story

Meet Alice. Her dad gave her $8 to buy snacks. She loves chocolate bars and strawberries, and she wants to find the right amount of strawberries and chocolate for her perfect snack given that she just has$8.

## Objectives

This chapter has one main goal: maximizing utility. Getting there requires understanding the following:

1. Budget Constraint — Alice cannot spend more than what she has
2. Marginal Rate of Transformation — On the market, a strawberry is worth a certain amount chocolate
3. Utility Function — Each combination of chocolate and strawberries gives Alice some utility
4. Marginal Rate of Substitution — Alice may accept to exchange some of her strawberries for some chocolate, as to her, a strawberry is worth a certain amount of chocolate
5. Utility Maximization — Alice maximizes utility when her value for one of her strawberries in terms of chocolate is the same as the market
6. Demand — Alice is able to figure out the amount of chocolate and strawberries she will buy