consumer choice
the law of diminishing marginal utility states that the
marginal utility associated with the consumption of a good or service becomes smaller with each extra unit that is consumed in a given time period.
equal marginal principle
marginal utility of A/price of A = marginal utility of B/price of B
suppose the budget line shifts to the right. what could have caused this?
- an increase in consumer income - a decrease in th eprice of both goods
which of the following characterize indifference curves?
- they are downward sloping - they do not cross
the budget condition is given by which of the following?
Pa x Qa + Pb x Qb
dave bought a pizza question
THE MARGINAL UTILITY DERIVED FROM THE FOURTH SLICE IS LESS THAN THE MARGINAL UTILITY DERIVED FROM THE THIRD SLICE
the difference between total utility and marginal utility is that marginal utility is the:
added satisfaction of consuming another unit of the good, whereas total utility is the cumulative marginal utilities of all units consumed.
marginal utility is the
additional satisfaction or happiness received from the consumption of an additional unit of a good or service
a curve that shows the combinations of two products that generate the same amount of total utility or satisfaction is called
an indifference curve
because of diminishing marginal utility, indifference curves are
convex to the origin
the law of diminishing marginal utility helps explain one of the fundamentals behind the law of _______________
demand
indifference curves are convex to the origin due to
diminsihing marginal utility
diminishing marginal utility means total utility is:
increasing at a decreasing rate as long as marginal utility is positive.
a curve that shows the combinations of two products that generate the same amount of total utility of satisfaction is called an _______________ curve
indifference curve
on a budget line graph, a decrease in income and/or an increase in the price of both goods will shift the budget line to the ________
left
utility maximization is the process of obtaining the greatest level of
overall satisfaction or happiness from consuming goods and services, subject to consumers' preferences, incomes, and prices.
in economics, utility refers to the
satisfaction or happiness received from the consumption of goods and services
utility maximization helps explain the _______________ effect that is noted when explaining the law of demand
substitution
economists measure utility with a unit called the __________, which is subjective in nature
util
by always selecting the best option after considering all benefits and costs, you will increase your total
utility
the ___________ associated with the consumption of goods and services is measured in 'Utils' by economists
utility