Economics 3 Flashcards
0
Q
How do you compute marginal utility?
A
Dividing change in total utility by the change in number of units consumed
1
Q
The idea that as utility increases with the continued consumption of a good, a point will be reached when the utility of the additional unit will be less then the one before it.
A
Diminishing marginal utility
2
Q
The term used in economics to define a consumer’s satisfaction
A
Utility
3
Q
The economics view of human action is to study the results of adding one more unit
A
Marginal analysis
4
Q
As price changes Nd consumers value goods comparably, consuxmers will respond by substituting more expensive goods or cheaper goods
A
Substitution effect
