Consumer Behavior 10-15-2012
If you want to see your midterm:
If marginal utility from consuming more of a good is zero, total utility is
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,