Utility Maximization rule:
In order to maximize satisfaction, a consumer should allocate his or her money/ income so that the last dollar spent on each product yields the same amount of utility. Marginal utility per $ should be equal for each product you buy.

Algebraically:Marginal Utility of A / Price of A = Marginal Utility of B/Price of B

Deriving the Demand Schedule and Curve:

• A downward sloping demand curve is derived by changing the price of one product in the consumer-behavior model and then noting how that changes the maximum utility received from that demanded product.
• A demand schedule can simply be observed by finding alternate prices that a particular product is sold at and then finding the quantity of that product that the consumer will purchase.

The Income Effect (explains why demand curves are downsloping)

• The impact that a change in the price of a product has on a consumer's real income and consequently on the quantity demanded of that good.
• If the price of salt increases by $0.05, this has a little impact on the consumers total income. However if the price of a car rises by $10,000, there is a lot of impact on the consumers total income, and quantity demanded may fall.
  

- Substitution is employed to restore equilibrium caused by an imbalance. Such imbalance occurs when the price of product A falls and leads to the last dollar spent on imaginary product B to yield more utility than it did on the last dollar spent on A.

The Substitution effect (Explains why demand curves are downsloping)

• The impact that a change in a product's price has on its relative expensiveness and consequently on the quantity demanded. The income and subsitution effects explain why the downward slope of a demand curve.
• Example: When the price of Beef sky rockets from $1 per pound to $4 per pound, the Qd will decrease. This causes the downward slope of beef, and in return will change other substitute good's Qd.