Economics 1021A/B Lecture Notes - Lecture 12: Marginal Utility, Memory Management Unit, Demand Curve

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Nicholas Kahnert

Document Summary

A consumer"s choice of what to buy is influences by the following general factors: Include all things that a consumer can afford to buy. A consumers budget line refers to all possible consumption allocation possibilities, when all income is spent. Consider lisa, who buys only two goods : movies and pop, she reaches the limit of her consumption possibilities. Lisa"s budget line shoes the limit of her consumption possibilities. Consumption possibilities all combinations at the points a to f affordable. Some goods are indivisible (must be bought in whole units) Other goods are divisible goods and can be bought in any quantity. The li(cid:374)e through poi(cid:374)ts a to f is lisa"s (cid:271)udget li(cid:374)e. The choice that lisa makes depends on her preferences her likes and dislikes. Her benefit or satisfaction from consuming a good or service is called utility. Abstract concept where scale is somewhat arbitrary. Total benefit a person gets from the consumption of goods.