Utility Flashcards
1
Q
What is utility?
A
A measure of how satisfied a consumer is
2
Q
What is an ordinal concept?
A
Preference bundles can be ranked from best to worst
3
Q
What is cardinal utility?
A
A measure of how much better one bundle is compared to another
4
Q
What is the utility formula?
A
u=q1 * q2
5
Q
What is marginal utility?
A
Indicates how much a consumer’s utility changes when they consume more of a given good
6
Q
What is diminishing marginal utility?
A
Consuming more of one good gives you less satisfaction
7
Q
A
