ABSTRACT
In this chapter we emphasize a few issues in the microeconomics of consumption that are generally either not discussed in introductory economics courses or are taught without proper balance. These issues are, however, necessary to understand the actual workings of real markets. Chapter 2 provided some criticisms of the mainstream approach. In this chapter we argue that mainstream economics is incomplete and hence misleading and that this has dire consequences for economic theory and policy. We emphasize the need to understand the psychology of consumption, an issue that is not taught sufficiently in standard treatments of the subject. This is of utmost importance, because by disregarding this aspect of the topic most introductory economics textbooks become anachronistic and will be overtaken by the newer budding field of behavioral economics. This chapter will provide an introduction to viewing demand from a behavioral perspective.
