The model of consumer behavior developed in Chapter 2 and applied in Chapter 3 is clearly limited both in scope and in realism. The process of extending and improving the model in various directions will occupy much of the rest of the book and is the particular subject matter of Part Four. In this chapter, we make a start on these extensions but only in a very limited way. In particular, in §4.1 and §4.2, we show how labor supply decisions, savings behavior, and purchases of durable goods can be handled within the framework of utility maximization subject to a linear budget constraint, provided the arguments of the utility function and the constraint are appropriately redefined. We shall refer to these models as neoclassical, a name we use to label the assumption of linear budget constraints with fixed, known prices. In the present context, none of the neoclassical models turns out to be very realistic and hence the substantial attention paid to their improvement in Part Four. Nevertheless, it is extremely important to understand them. First, they play an important part in much contemporary economic analysis, and it is essential to understand exactly the assumptions on which their theoretical validity depends. Second, they yield important insights that we ignore at our peril and, in Part Four, they will be the platform on which we attempt to build more realistic and relevant models.