The concept of the margin Flashcards
1
Q
What is the marginal unit in economics?
A
The marginal unit is the next or additional unit of a good or service consumed or produced.
2
Q
What are total, average and marginal utility?
A
Total utility is the total satisfaction gained from consuming all units of a good.
Average utility is total utility divided by the number of units consumed.
Marginal utility is the additional satisfaction gained from consuming one more unit of a good.
3
Q
What is diminishing marginal utility, and how does it relate to the demand curve?
A
Diminishing marginal utility means each additional unit of a good provides less additional satisfaction, which explains why demand decreases as price rises.
