ECON 1011 Lecture Notes - Lecture 11: Trigonometric Functions, Marginal Utility, Demand Curve
ECON 1011 verified notes
11/30View all
Document Summary
Only two demand curves have constant elasticity values. At opposite ends of spectrum (completely vertical & completely horizontal ones) Any number of other demand curves between. Every other demand curve has all three values of elasticity (inelastic, etc. ) (can"t actually have 1/4 of a chair but in theory it works) Economist"s measurement of happiness/satisfaction from a good. Coffee (50 units) vs. donut (30 units) Get less happy after a certain amount (get sick if ate too much, etc. ) Point at which utility slope goes from positive to negative. Start to become unhappy with too much. Mu = amount of utility agent gets from consuming one more unit of a good (as though utility were constant. Know that"s not true, that law of diminishing mu exists but for theoretical purposes Secant line (slope) at point = mu. Gets less and less satisfying after that. Rule 1: agent must allocate all of their money.
