7.1 Utility Flashcards
utility and marginal utility, diminishing marginal utility, equi-marginal principle
1
Q
Utility
A
the satisfaction received from consumption
2
Q
Total utility
A
the total satisfaction received from consumption
3
Q
Marginal utility
A
the utility derived from the consumption of one more unit of the good or service
4
Q
Diminishing marginal utility
A
the fall in marginal utility as consumption increases
5
Q
Equimarginal principle
A
consumers maximise their utility where their marginal valuation for each product consumed is the same
