Chapter 20 Key Concepts Flashcards
Utility
1
Q
Satisfaction derived from the consumption of a good
A
Utility
2
Q
Imaginary unit used to hypothetically measure the satisfaction derived from the consumption of a good
A
Util
3
Q
Total satisfaction derived from the consumption of an extra unit of a good
A
Marginal Utility
4
Q
The economic theory that as you consume more and more of the same good the extra utility you get from each additional unit of the good declines.
A
Diminishing marginal utility
5
Q
The marginal utility of the last unit purchased of each good divided by the price should be equal Marginal Utility(a)/Price(a) = Marginal utility (b)/Price(b)
A
Utility maximization rule
