Economics, 3rd Edition

BACKGROUND TO DEMAND: 

THE THEORY OF CONSUMER 

CHOICE

5

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CHAPTER 5  BACKGROUND TO DEMAND: THE THEORY OF CONSUMER CHOICE  103

understanding of economics. Value is a subjective term – what one individual thinks represents value is 

often different to that of another individual. Value can be seen as the worth to an individual of owning an 

item represented by the satisfaction derived from its consumption. In broad terms, consumption in this 

case does not just mean the final consumer. Value can be related to the purchase of a product which is a 

gift or something used by a business for production.

Classical economists used the term