MGMT 4A Lecture Notes - Lecture 6: Ordinal Utility, Ice Cream, Broccoli
Document Summary
Marketing : activities, institutes and processes aimed at creating , communicating and delivering and exchanging products or services that provide value to customers, clients, partners and the society at large. Opportunity cost: value of the best alternative forgone in a situation in which a choice is made mutually between several mutually exclusive alternatives. Cardinal utility: consumer satisfaction measured in actual numbers. Ordinal utility: ranks goods relative to one another. Eg: i like broccoli, but i like peas more than broccoli and i like ice cream more than that. Without a measure saying what you like and how much you like it. Marginal meaning: change in one thing that occurs with a one-unit change in another thing. Diminishing marginal utility: the more the quantity increases overtime it is likely to decrease because of the over-doing of it. Key economic assumption: all economic agents optimize something as a way of explaining their behavior.
