ECON 1116 Chapter Notes - Chapter 10: Normal Good, Demand Curve, Giffen Good

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coralseal265

7 Mar 2014

School

Northeastern University

Department

Economics

Course

ECON 1116

Professor

Osborne Jackson

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Utility: of a consumer is a measure of the satisfaction the consumer derives from consumption of the goods and services. Consumption bundle: is the collection of all the goods and services consumed by that individual. Utility function: gives the total utility generated by his or her consumption bundle. (relationship between individual"s consumption bundle and total amount of utility it generates for that individual. When people consume, they take into account their preferences and tastes in a more or less rational way. Marginal utility: of a good or service is the change in total utility generated by consuming one additional unit of that good or service. (the change in total utility from consuming one additional clam). Marginal utility curve: shows how marginal utility depends on the quantity of a good or service consumed. (constructed by plotting points at the midpoint of the unit interval). Expenditure on good 1 + expenditure on good 2 total income.

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.

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13. In economics, the term marginal utility is defined as the a. change in total satisfaction caused by the consumption of an additional unit of the good. b. average utility of each unit of a good consumed. c. inverse of the measure of total utility. d. total satisfaction received from consumption of a good. e. price of the last unit consumed.

The consumer optimum:

A. occurs when a consumer buys more of a good as a result of a relative price change.

B. the combo of goods and services that maximizes utility for the given income.

C. is the additional satisfaction derived from consuming one more unit of a good or service.

D. occurs when there is a change in purchasing power as a result of a change in the price of a good.

E. occurs when utility declines as consumption increases.

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ECON 1116 Chapter Notes - Chapter 10: Normal Good, Demand Curve, Giffen Good

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