Chapter 10: Consumer Choice Theory
1. Since this chapter emphasizes the application of the rule of rational choice (e.g., consumer
equilibrium), it may be worth quickly reviewing the rule at the beginning of this chapter.
2. A good classroom example of diminishing marginal utility is how you feel after going out to an all-you-
can-eat meal. You feel overstuffed, because you continued to eat as long as the marginal utility was
3. It is worth going over additional examples of quantity discounts (beer illustrations–kegs versus cases
versus 12-packs versus 6-packs–seem to catch students attention) to supplement the text s example of
pizza discount coupons (the second one is at a lower price or even free) as a reflection of diminishing
marginal utility, to show how much behavior (especially price discrimination) is understandable with that
simple concept.
4. As an extension of the text analysis, you can show students that you do not necessarily save the
dollar amount of a quantity discount, in terms of being better off. Say you would buy only one unit of a
5. It is useful to do added numerical examples of consumer equilibrium to make sure students
understand. One good way to get students involved in the process is to let different ones choose
6. One useful way to illustrate the logic in this chapter is to ask students what would have to be true
about the price of a good for someone to want to maximize the total utility from consuming a good, and
7. Since this chapter often focuses on the equilibrium results in certain situations, it can be worth
emphasizing that the primary analytical purpose of consumer equilibrium is not the equilibrium, but to