ECON 1000 Chapter Notes - Chapter 8: Marginal Cost, Normal Good, Demand Curve
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ECON 1000 Full Course Notes
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All the things you can afford to buy. Budget line: marks the boundary between those combinations of goods and services that a household can afford buy and those it cannot. A rise in income shifts the budget line outward but slope remains the same. A change in price changes the slope of the budget line. Preferences: a description of one"s likes and dislikes. Utility: the benefit of satisfaction that a person gets from the consumption of goods and. The total benefit that a person gets from the consumption of all the different goods and services. Depends on level of consumption, more consumption = more utility. The change in total utility that results from a one-unit increase in the quantity of a good consumed. Decreases as more of each good is consumed. Utility-maximizing choice available income in the way that maximizes his or her total utility. Consumer equilibrium: a situation in which a consumer has allocated all of their.