ECON 10A Lecture Notes - Lecture 3: Quasi, Ordinal Utility, Utility

187 views4 pages

coppermosquito271

28 Feb 2018

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

This is the slope of the indi erence curve. Hypothesis of diminishing mrs: the rate at which you are willing to substitute good 1 for good 2 declines as there is more of good 1 and less of good 2. Ordinal utility: numbers are not important and don"t tell rankings, how it orders bundles of goods is the most important. Ex: in written notes (ordinal utility makes most pre ered) U(x , x )= (x , x ) x =k/x . If u(x , x ) is a utility function representing a particular set of preferences, however there are other functions that can represent the same preferences. U(x , x )= 3*min(x , x ) also represent s those same preferences with the same ordering of bundles. Any transformation of one set of numbers into another set of numbers that preserves the order of those numbers.

Related Questions

budget line

marginal utility

complete property of preferences

market demand

consumption bundle

substitution effect

Giffen good

total effect

income effect

transitive property of preferences

indifference curves

utility

the marginal rate of substitution

utility function

1.	_____	The satisfaction or benefit that consumers receive from consuming goods or services.
2.	________________ _	A particular combination of specific quantities of goods or services
3.	________________ _	Consumers can rank all conceivable bundles of goods or services
4.	_____	If A is preferred to B, and B is preferred to C, then A is always preferred to C.
5.	_____	Equation showing a consumerâs perception of the total utility forthcoming from consuming each bundle of goods and services.
6.	_____	A set of consumption bundles each and every one of which provides a consumer with exactly the same level of total utility.
7.	_____	The number of units of Y that must be given up for total utility to remain the same when one more unit of X is consumed.
8.	_____	The addition to total utility attributable to consuming one more unit of a good, holding the consumption of all other goods constant.
9.	_____	The line showing all bundles of goods that can be purchased at given prices if the entire income is spent.
10.	_____	The change in the consumption of a good that would result if the consumer remained on the original indifference curve after the price of the good changes.
11.	_____	The change in consumption of goods results strictly from the change in purchasing power after the price of a good changes.
12.	________________ _	The sum of the substitution and income effects.
13.	_____	A good for which quantity demanded varies directly with price, causing an upward sloping demand curve.
14.	_____	A list of prices and the corresponding quantity consumers are willing and able to purchase at each price.

blushwildebeest943

Suppose all consumers are maximizing utility with convex indifference curves. All face the same prices, and are perfectly rational. According to microeconomic models, at the maximization bundle they should

A. All have the same marginal rate of substitution

B. All buy more of the least expensive good

C. All end up with the same bundle of goods

D. All have the same level of satisfaction

Consider an indifference map with food on the vertical axis and shelter on the horizontal axis.

If a consumer is willing to give up 3 units of food in exchange for 1 unit of shelter and food is priced at $5 per unit and shelter at $10 per unit, then the consumer is:

A. Purchasing too much food for utility maximization

B. Purchasing too much shelter for utility maximization

C. Purchasing just the right amount of each good for utility maximization

D. Purchasing less than the budget would allow

If a consumer with convex indifference curves moves along her budget line, closer and closer to the horizontal axis, as she is moving:

		A. The marginal utility she gets from good Y declines.
		B. The marginal utility she gets from good X declines.
		C. The marginal utility she gets from good X increases.
		D. The price ratio of the two goods changes.

ECON 10A Lecture Notes - Lecture 3: Quasi, Ordinal Utility, Utility

Document Summary

Get access

Related Documents

ECON 10A Study Guide - Midterm Guide: Indifference Curve, Budget Constraint, Utility

ECO200Y1 Lecture Notes - Lecture 3: Utility, Indifference Curve

ECO 405 Lecture Notes - Lecture 3: Ceteris Paribus, Utility, Peer Group

Related Questions