Consumer Theory is a branch of economics that studies how individuals make decisions about spending their money. It examines how consumers allocate their limited resources among various goods and services to maximize their satisfaction or utility. Key concepts include preferences, budget constraints, and the trade-offs consumers face when choosing between different options. The theory also explores how changes in prices and income affect consumer behavior. For instance, when the price of a product, like gasoline, rises, consumers may buy less of it or switch to alternatives, such as public transportation. Understanding these patterns helps businesses and policymakers make informed decisions.