Formulas Flashcards by Sirui Fu | Brainscape

Q

Utility Maxing Rule

A

MUx/Px = MUy/Py

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Q

Budget Constraint

A

Px * Qx + Py * Qy ≤ Income

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Q

Total Utility

A

TU = ∑MU
TU = Sum of MU of all units consumed

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Q

Marginal Utility

A

MU = ΔTU ÷ ΔQ

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Q

Marginal Rate of Substitution (MRS)

A

MRS = MUx ÷ MUy

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Q

A

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