ECON 2300 Study Guide - Quasilinear Utility, Utility, Indifference Curve

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4 Dec 2013

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Preferences - a reminder: x y: x is preferred strictly to y, x ~ y: x and y are equally preferred, x y: x is preferred at least as much as is y. Completeness: for any two bundles x and y it is always possible to state either that x or that y y x. Reflexivity: any bundle x is always at least as preferred as itself; i. e. x x. Transitivity: if x is at least as preferred as y, and y is at least as preferred as z, then x is at least as preferred as z; i. e. x y and y z x z. U(x") = u(x ): utility is an ordinal (i. e. ordering) concept, e. g. if u(x) = 6 and u(y) = 2 then bundle x is strictly preferred to bundle y. But x is not preferred three times as much as is y.

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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.

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ECON 2300 Study Guide - Quasilinear Utility, Utility, Indifference Curve

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