BIOCH498 Lecture Notes - Lecture 15: Public Good, Socialist Party Of America, Demand Curve

• School: University of Alberta
• Department: Biochemistry
• Course: BIOCH498
• Professor: Brian Lanoil

Document Summary

The satisfaction, happiness, or need fulfilment a consumer receives from the good/services they consume. Margin utility - change in utility that results from an incremental change in quantity. The greater is the amount consumed of a good/service, the smaller is the increase in utility from the next unit consumed. The more you have something, the less your happiness increases. Subject to their level of income (i) I= p1q1 , p2 q2 , pn qn. I= p1q1+p2q2++ pnqn these 2 together = consumer equilibrium i. e. mu (apples) / mu (oranges) = Consumer equilibrium occurs when rate at which the consumer trades one good for another = the rate at which the market is willing to trade one good for another. Mu apples/p apples = additional happiness derived by spending one more dollar on apple. , hence, by more of apples and less oranges. Note: when you buy more apples, the mu of apples decreases.