Chapter 7: Utilitarianism

Question 1

Utility

Answer 1

Satisfaction with one’s consumer choices

Question 2

Law of Diminishing Marginal Utility

Answer 2

Common pattern that each marginal unit of a good provides less utility than the previous unit

Question 3

Marginal Utility

Answer 3

Additional utility provided by one additional unit of consumption

Question 4

Normal Goods

Answer 4

Goods for which a rise in income leads to rise of consumption, and decline in income leads to fall of consumption

Question 5

Inferior Goods

Answer 5

Demand declines as income rises, or demand rises as income falls