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