Religious, Spiritual, or Social Values and Regulations, Utility Function and Demand

Often spiritualism and religion impose social and economic duties (constraints) on its adherents. Islam promotes various encouragements, limitations and prohibitions on expenditure, consumption and production. So, in modern world, does Islamic brand of economics have a place? Capitalism and Communism have marked this era. Tools of utility and profit maximization have supported renditions of Capitalism: Classical, Keynesian, Neo-Classical Economics and Rational Expectations. This paper examines consumer behavior given Islamic constraints. Some Muslim economists are wary about utility maximization, convinced that the selfishness axiom cannot be adequate for a system bound up in selflessness. Besides, they report that, by some accounts, people do not appear to maximize utility. This paper, using the elementary combination of indifference curve and budget line for optimization exercise, besides showing the unfoundedness of this criticism (because selfishness could include selflessness as its end – finding satisfaction in being considerate and generous), illustrates how, through substitution and income effects, Islamic rules and regulations influence consumption. So, the baby need not be thrown out with the bath water. A reinvention of the wheel is unnecessary