ECON101 Lecture Notes - Lecture 3: Preferred Stock, Pennsylvania Route 191

• School: University of Alberta
• Department: Economics
• Course: ECON101
• Professor: Gordon Lee

Document Summary

The change in utility that results from an incremental change in consumption of a good or service. Additional satisfactions consumer gains from consuming one more unit of good/service. The greater is the amount consumed of a good or service, the smaller is the increase in utility from an incremental increase in the consumption of that good. Or, the more consumed of a good, the smaller is the marginal utility. The less of the good consumed, the greater is the marginal utility. The consumer"s objective is to maximize his/her utility given his/her level of income. (that is, you want to spend your money so that you are as happy as possible. ) When the consumer has satis ed this objective, he/she has reached his/her consumer optimum. Produce combination of goods that makes you happiest, restrained by your income. The consumer equilibrium is de ned as those levels of the quantities such that the consumers utility is maximized.