Consumer Demand and Utility Flashcards

1
Q

What is represented by an indifference curve?

A

Various quantities of two commodities that give an individual the same total utility as plotted on a graph.

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2
Q

Define “utility”, as used in economics.

A

Satisfaction derived from the acquisition or use of a commodity.

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3
Q

Define “utils”, as used in economics.

A

Hypothetical unit of measure used to measure satisfaction derived from a commodity.

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4
Q

Define “marginal utility”.

A

The utility derived from each (additional) marginal unit (i.e., from the last unit acquired).

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5
Q

Define the “law of diminishing marginal utility”.

A

Decreasing utility (satisfaction) is derived from each additional (marginal) unit of a commodity acquired.

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