01:220:102 Chapter Notes - Chapter 10: Marginal Utility, Budget Constraint, Utility

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Introduction to microeconomics 10. 1 - utility: getting satisfaction. Marginal utility - (of a good or service) the change in total utility generated by consuming one additional unit of that good or service. Or, to put it slightly differently, the more of a good or service you consume, the closer you are to being satiated reaching a point at which an additional unit of the good adds nothing to your satisfaction. The principle of diminishing marginal utility isn"t always true. But it is true in the great majority of cases, enough to serve as a foundation for our analysis of consumer behavior. To say that you can"t have too much of a good thing means that for any good that you enjoy higher consumption will always lead to higher utility. Introduction to microeconomics 10. 2 budgets & optimal consumption. Budget constraint - requires that the cost of a consumer"s consumption bundle be no more than the consumer"s income.

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1.	_____	The satisfaction or benefit that consumers receive from consuming goods or services.
2.	________________ _	A particular combination of specific quantities of goods or services
3.	________________ _	Consumers can rank all conceivable bundles of goods or services
4.	_____	If A is preferred to B, and B is preferred to C, then A is always preferred to C.
5.	_____	Equation showing a consumerâs perception of the total utility forthcoming from consuming each bundle of goods and services.
6.	_____	A set of consumption bundles each and every one of which provides a consumer with exactly the same level of total utility.
7.	_____	The number of units of Y that must be given up for total utility to remain the same when one more unit of X is consumed.
8.	_____	The addition to total utility attributable to consuming one more unit of a good, holding the consumption of all other goods constant.
9.	_____	The line showing all bundles of goods that can be purchased at given prices if the entire income is spent.
10.	_____	The change in the consumption of a good that would result if the consumer remained on the original indifference curve after the price of the good changes.
11.	_____	The change in consumption of goods results strictly from the change in purchasing power after the price of a good changes.
12.	________________ _	The sum of the substitution and income effects.
13.	_____	A good for which quantity demanded varies directly with price, causing an upward sloping demand curve.
14.	_____	A list of prices and the corresponding quantity consumers are willing and able to purchase at each price.

blushwildebeest943

Fill in the blanks:

Your taste determines the ______you derive from consuming a particular good
_________utility is the change in _______utility resulting from a unit additional change in the consumption of a good.
As long as marginal utility is positive, total utility is
The law of diminishing marginal utility states that as an individual consumes more of a good during a given time period, other things constant, total utility _______

coffeeprairie-dog9

Marginal utility is defined as the

a. extra satisfaction the consumer receives from an extra $1 of income.

b. total level of satisfaction a consumer receives upon the consumption of a certain number of goods.

c. number of hours a consumer would be willing to work to receive a certain product.

d. extra satisfaction a person derives from consuming an additional unit of a good.

tanfish840

01:220:102 Chapter Notes - Chapter 10: Marginal Utility, Budget Constraint, Utility

01:220:102 Full Course Notes

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