1.2.1 Rational Decision Making Flashcards
1
Q
Rational decision making
A
Where consumers allocate their expenditure on goods & services to maximise utility and produces allocate their resources to maximise profits.
2
Q
Market
A
Where consumers and producers come into contact with each other to exchange goods & services.
3
Q
Utility
A
The amount of satisfaction obtained from consuming a good &/or service.
4
Q
Marginal utility
A
The utility or satisfaction derived from consuming one extra unit of a good or service.
5
Q
Utility maximisation
A
The maximum satisfaction derived from consuming every product.
6
Q
Profit maximisation
A
Where producers use resources to maximise profits from the goods & services produced.
