2.7 - margin Flashcards
1
Q
Marginal Cost
A
Change in a variable due to an increase of one unit of another variable
2
Q
Marginal cost equation
A
TC at new output level / TC at output level one less than new
3
Q
Marginal Utility
A
Benefit gained from consuming one extra unit of a good
4
Q
Total utility
A
Overall benefit gained from consuming a good
5
Q
Law of diminishing marginal utility
A
Each additional unit of a good consumed, marginal utility is decreased
6
Q
When will rational consumers stop consuming a good
A
After marginal utility is no longer equal or above price
7
Q
When happens when marginal utility decreases?
A
Price a consumer is willing to pay falls
