Full Name: Course/Year:

MODULE 4 – ECON 221

CONSUMER BEHAVIOR AND UTILITY MAXIMIZATION

In almost all circumstances, we, as consumers differ from each other. Each of us
has our own needs, wants, and demands. We also have different likes, dislikes,
reactions, lifestyles, standards, traditions, and many more. It is for this reason that
the behavior of consumers is difficult to measure because each of us wanted to
achieve maximum satisfaction given the limited resources (budget or income).
Because of this, economics would like to explain the reason why consumers have
various reactions and respond differently in a particular manner.

In this module, we are going to discuss the different factors that influence behavior,
utility, indifference curve, and budget line.

Learning Outcomes: at the end of module 4, you will be able to:

1. identify the factors influencing consumer behavior; and
2. elaborate theInfundamental
this module,concept
we are going
of utility
to discuss
based on
thethe
different factors that influence behavior,
individual experience.
utility, indifference curve, and budget line.

Learning Activity 4.1

SELF EVALUATION. The purpose of this activity is to determine your behavior and preferences
towards buying or consuming products and services in general. To do this, evaluate yourself by
answering the questions below. Refer to goods/services in general – not specific service or product
you are buying. You are expected to give a concise yet comprehensive answer.

Why do you buy products?

How, when, and where do

you usually buy or avail
those products/services?

How often do you buy/avail

them?

How often do you use them?

How do you know that you

are satisfied and/or
dissatisfied?
 MODULE 4 – Consumer Behavior and Utility Maximization 2

Learning Activity 4.2

Read the article entitled “Social Media Impact on Consumer Behavior” and share your opinion guided
by the questions below.

Is it true? As a social media user, are you affected by the posts of your friends/family? Do you feel
depressed seeing the achievements of others posted on social media? When you post something on
social media, what is your motive? Is it rewarding?

Feel free to share but you are not forced to go into the details. 25 points

You may use another sheet if the space provided is not enough. Just don’t forget to write your name.

Learning Activity 4.3: EXPLAIN

Watch the pre-recorded video on the discussion of the topic. Please take note of some concepts for
application.

Southern Christian College Econ 221 – Basic Microeconomics

 MODULE 4 – Consumer Behavior and Utility Maximization 3

Learning Activity 4.4: ELABORATE

As a rational consumer, how will you apply the concept of the indifference curve, substitution, budget
line, and utility (satisfaction), as a whole in your day-to-day activities? Do it by making a slogan
depicting your behavior as a consumer. You can write/print it in any form that you wish as long as
not expensive (e.g. short/ long size of bond paper, 1/8 illustration board, or can be submitted online
using paint apps, etc.). Be creative!

Criteria in giving score:

Craftsmanship 10 pts. Originality 7 pts Total: 30 pts.

Creativity 10 pts Grammar 3 pts.

Big Ideas…
 A consumer is an individual who purchases a product for his/her personal use.
 Consumer behavior is the study of when, where, what, how, and why people do or
do not buy products.
 Cultural, social, personal, psychological, and economic are the factors that affect
consumer behavior.
 The consumption of any good or service is assumed to give the consumer
satisfaction or utility.
 Satisfaction or utility can be measured using cardinal and ordinal approaches.
 The marginal utility emphasizes that as consumers consume more and more of the
same good, satisfaction will decline – Law of Diminishing Marginal Utility.
 A consumer in his attempt to maximize satisfaction will try to reach the highest
possible indifference curve.
 A budget line shows the various combinations of two products that will be
purchased by the consumer within his/her income given the prices of the product.

_______________________________________________________________________________________________________________

Freedom space…
Feel free to write here your evaluation, suggestion/s on how we can improve your learning.

Ephesians 4:31-32: “Stop being bitter and angry and mad at others. Don’t
yell at one another or curse each other or ever be rude. Instead, be kind and
merciful, and forgive others, just as God forgave you because of Christ.”

Southern Christian College Econ 221 – Basic Microeconomics