AREC 202 Lecture Notes - Lecture 17: Weight Watchers, Budget Constraint, Snack
25 Oct 2016
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Tuesday, october 25, 2016 week 10 day 1. Optimal consumption choice: the optimal consumption bundle is the consumption bundle that maximizes a consumer"s total utility, given his or her budget constraint. For inquiring minds: food for thought on budget constraints. Budget constraints aren"t just about money. in fact, there are many other budget constraints affecting our lives. The dieter is just like a consumer choosing a consumption bundle: points are the equivalent of prices, and the overall point limit is the equivalent of total income. Spending the marginal dollar: the marginal utility per dollar spent on a good or service is the additional utility from spending one more dollar on that good or service. Optimal consumption rule: the optimal consumption rule says that when a consumer maximizes utility, the marginal utility per dollar spent must be the same for all goods and services in the consumption bundle, economics in action.
