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Related Flashcards
Cards In This Set
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Utility:
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The want-satisfying power of a good/service
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Utility Analysis:
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The analysis of consumer decision making based on utility maximization
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What did bentham want ?
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He said that society should seek the greatest happiness for the greatest number and used an arithmatic formula to measure happiness
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Util
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A way to measure satisfaction (made by Bentham)
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Marginal Utility
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Change in totaly utility divided by the change in the umber of units consumed
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How do you find marginal utility
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=change in total utility/change in number of units consumed
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Zero Marginal Utility
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There was no additional utility
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Diminishing Marginal Utility
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The principle that as an individual consumes more of a particular commodity, the total level of utility or satisfaction, derived from that consumption usually increases. Eventually however the rate at which it increases diminishes as more in consumed
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Why does marginal utility not increase?
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Because if it only went up then nobody would try out other items because they would be extremely happy with the one
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Consumer Optimum
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When the consumer has attained an optimum (
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