Explain the theory of consumer behavior Provide a realworld

Explain the theory of consumer behavior. Provide a real-world example of each component and explain why it is important to use. Do not use examples from the book or examples from class. Then, explain how this theory explains to us about marginal utility and total utility.  

final exam, specific answer for all parts and great details please

Solution

Consumer behavior is the study of how individual consumers and how their decisions are dependent on prices , demand type , need usually describe psychological, social and personal choices under given conditions. For example : choice of smoking is a luxury irrespective of price and high taxes and how it is harmful for health. Total utility defines total amount of satisfaction from consuming a commodity like happiness from having ice cream for a kid. However margianl utiltiy is the additional satisfaction from every additional unit consumed . Usually marginal utility keeps falling with every additional unit which diminshes eventually.