Marginal Utility – Flashcards
Unlock all answers in this set
Unlock answersquestion
marginal utility equation
answer
change in total utility over change in number of products
question
utility
answer
A measure of satisfaction received from possession/consumption of goods/services. is relative to the individual
question
util
answer
one unit of satisfaction
question
marginal utility
answer
additional utility derived from consuming one more unit of a product or service
question
total utility
answer
measure of overall satisfaction from possessing/consuming a quantity of a product or service
question
disutility
answer
dissatisfaction caused from possessing or consuming too much of a product/service. When marginal utility becomes negative
question
diminishing marginal utility
answer
the principle that states the more of a good someone obtains over time, the less additional utility is received. Satisfaction goes down as consumption goes up
question
consumer equilibrium
answer
when a combination of goods/services purchased is the most satisfactory. Must be at equilibrium to maximize satisfaction
question
explaining law of demand
answer
diminishing marginal utility, substitution effect, income effect
