Consumption Flashcards
CONSUMPTION
The use of goods and services by consumers
to address needs
and wants
Free Goods and
Economic
Goods
Idk tbh
Final Goods
Final products
Intermediate
Goods
Used to ma”e frinal product
LAW OF
DIMINISHING UTILITY
Our satisfaction becomes lower as we reach our saturation point LAW OF
DIMINISHING UTILITY
LAW OF
ECONOMIC ORDER
LAW OF
ECONOMIC ORDER
natural tendency to satisfy our needs to live
LAW OF IMITATION
People feel satisfaction when they imitate other people
LAW OF HARMONY
It is normal to buy products that complement each other to attain greater satisfaction
LAW OF VARIETY
We have greater satisfaction if we use variety of products than using only one
UTILITY
measure of happiness and satisfaction derived from consuming goods and services;
benefit received from consumption
TOTAL UTILITY
overall benefit gained from consumption
MARGINAL UTILITY
additional utility gained from consuming an additional unit of goods and services
UTILITY MAXIMIZATION
When making a purchase decision, a consumer attempts to get the greatest value possible from expenditure of least amount of money. The objective is to maximize the total value derived from the available money.
UTILITARIANISM
urges that actions should be judged right or wrong to the extent they increase or decrease human well-being or utility
We should take decisions on the basis of increasing happiness in the society.
UTILITARIANISM
