Class Notes (838,239)
Canada (510,787)
Economics (472)
ECON 101 (111)

Consumer Behavior

2 Pages
Unlock Document

ECON 101
Robert Gateman

Consumer Behavior 10-15-2012 If you want to see your midterm: Tuesdays 4:30-5:30 Brkx 2363 If marginal utility from consuming more of a good is zero, total utility is constant. The hypothesis of diminishing marginal utility states that the more of a commodity one is consuming, the less the additional utility obtained by an increase in its consumption. According to utility theory, a consumer will maximize total utility when goods A and B are consumed in quantities such that MUa/MUb equals the ratio of the price of A to the price of B. If Monique’s marginal utility is positive but decreases as more of a commodity is consumer, her total utility is increasing. The substitution effect refers to the change in quantity demanded that results from a change in relative prices. An increase in the absolute price of a good, other things constant, increases A change in the price of a good currently being consumed by a household, other
More Less

Related notes for ECON 101

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.