EC-1011: Definitions and key vocab

Question 1

Non-satiable

Lecture 1

Answer 1

nothing is ever enough or in more quantitative terms, more is better than less

Question 2

Completeness

Lecture 1

Answer 2

given two bundles of goods, either A or B are preferred over one another represented by A^pB or if both indifferent to eachother then represented by the equation A^iB

Question 3

Reflexiveness

Lecture 1

Answer 3

A^iA meaning good A is indifferent to itself (as good as itself)

Question 4

Continuity

Lecture 1

Answer 4

If A^pB and C is sufficiently close to B it is reasonable to assume that A^pC

Question 5

Transitivity

Lecture 1

Answer 5

if A^pB and B^pC it is reasonable to assume that a ranking occurs where good A is most preferred and good C is the least

Question 6

Marginal utility

Lecture 1

Answer 6

extra utility gained from consuming an extra unit

Question 7

Indifference curve definition

Lecture 1

Answer 7

curves representing all combinations of X and Y that give the same level of utility meaning that at any point on the curve, the consumer is left with an equal amount of utility

Question 8

The marginal rate of substitution (MRS)

Lecture 2

Answer 8

the rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility

hence it is the slope of the indifference curve

Question 9

Giffen good

Lecture 3

Answer 9

when the price rises, demand for that good rises with it