ECON 1100 Chapter Notes - Chapter 6: Kelvin, Nail Polish, Normal Good
23 Apr 2016
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These people are utility maximizers derived from the process of consumption. They decide how much labor to supply. They decide how much to consume today, or save for tomorrow. Utility is the satisfaction derived from the process of consumption. The unity that we derive from a particular good, deferens among consumers. Because consumers tastes or preferences are different across all individuals. Moreover, the utility from each particular unit of commodity (book or eggs) would depend on how much of that commodity an individual has previously consumed or used during a given time period. The consumer desire drops, the increase in utility/satisfaction from the second use will be lower than from the first use. The marginal utility is the change in utility based on the consumption of one extra unit of the good. Mu = u/ x (change in utility, per unit change in the use of good x)
