Chapter 10 Flashcards
1
Q
Define utility
A
The enjoyment or satisfaction that people receive from consuming goods and services.
2
Q
Law of diminishing marginal utility
A
The principle that consumers experience diminishing additional satisfaction as they consumer more of a good or service during a given period of time.
3
Q
Use the concept of utility to explain the law of demand
A
4
Q
Explain how social influence can affect consumption choices.
A
5
Q
Describe the behavioral economics approach to understanding decision making
A
6
Q
Conditions for maximizing utility`
A
Satisfy the rule of equal marginall utility per dollar spent:
Exhaust your budget
7
Q
Indifference curve
A
curve showing the combinations of consumption bundles that give a consumer the same total utility
