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Utility
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want satisfying power.
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Law of Dimishing mariginal utility
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added satisfaction declines as a consumer acquires additional units of a given product.
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Total Utility
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is the total amount of satisfaction or pleasure a person derives from consuming some specific quantity.
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Marginal Utility
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is the EXTRA satisfaction a consumer realizes from an additional unit of that product.
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Rational Behavior
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Consumers want to get "the most for their money" or, technically, to maximize their total utility.
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Budget Constraint
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At any point in time the consumer has a fixed, limited amount of money income.
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Utility-maximizing Rule
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To maximize satisfaction, the consumer should allocate his or her money income so that the last dollar spent on each product yields the same amount of extra (marginal) utility
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consumer equilibrium
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When the consumer has "balanced his/her margins" using the utility-maximizing rule, he or she has achieved this...
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