ECON 1050 Lecture Notes - Lecture 8: Marginal Utility
Document Summary
Econ 1050 chapter 8 notes: utility and demand. Consumption choices are put under two main areas: consumption. Consumption possibilities- all the things you can afford to buy. Consumer budget line- a budget line are the consumer possibilities limited by income and by the prices. Marks the boundaries between those combinations of goods/services that a household can afford to buy and what it can"t. Changes in consumption possibilities- consumption possibilities change when income or price change. Total utility-the total benefit that a person gets from the consumption of all the different goods and services. More consumption generally means a larger total utility unit increase in the quantity of a good consumed. A spread sheet solution- shows both products, the highest possible utility with a combination of the two will show up all of her available income in the way that maximizes her total utility. Consumer equilibrium- a situation in which a consumer has allocated.