Economic Objectives Flashcards
1
Q
Margin
A
difference between the price of the product and the costs (associated with making or selling the product)
2
Q
Utility
A
Measure of satisfation we get from purchasing and consuming a good or service
3
Q
Total utility
A
Total satisfaction from a given level of consumption
4
Q
Marginal utility
A
Change in satisfaction from consuming an extra unit
5
Q
Law of diminishing marginal utility
A
The more units are consumed, the lower the utility from consuming these units
6
Q
Producer’s objective
A
Maximise profit
Maximise top sales and market share
May have ethical objectives
7
Q
Consumer’s objective
A
Maximise their utility without spending more than their income
8
Q
Govt’s objective
A
Balance the resources of country with the needs and wants of population
