Chapter 30 - Utility Flashcards
1
Q
Utility
A
The satisfaction received from consumption.
2
Q
Law Of Diminishing Marginal Utility
A
As consumption increases, the satisfaction from consumption decreases.
3
Q
Total Utility
A
The total satisfaction received from consumption.
4
Q
Marginal Utility
A
The utility derived from the consumption of one more unit of the good or service.
5
Q
Equi-Marginal Principle
A
Consumers maximise their utility where their marginal valuation for each product consumed is the same.
6
Q
The Margin And Decision Making
A
Utility may be used to consider how consumers rank their purchases in relation to the satisfaction that is gained from their consumption.
7
Q
Equilibrium And Disequilibrium
A
The equimarignal principle is used to determine whether or not consumer equlibrium is being achieved
