Consumption and choice - JSS3 Business studies Lesson Note

Consumption refers to the use of goods and services to satisfy our wants and needs. When it comes to personal finance, consumption involves making choices about how we spend our money. This includes decisions about what to buy, how much to spend, and when to spend it. These choices are influenced by factors such as income, preferences, prices, and personal values.

People make consumption choices based on their preferences and what they perceive as the best way to maximize their satisfaction, or utility, given their limited resources. This is known as consumer choice theory. It suggests that individuals aim to maximize their utility by allocating their income across different goods and services in a way that brings them the greatest level of satisfaction or happiness.