After reading this chapter, students should be able to:

• Explain the Ranking Principle and the Choice Principle.
• Illustrate consumers' preferences for consumption-bundles graphically through indifference curves.
• Understand the properties and functions of indifference curves.
• Determine a consumer's willingness to trade one good for another by examining indifference curves.
• Explain the concept of utility and compare consumption bundles by calculating the numerical values of a given utility function.