MicroEconomics Chapter 7 Roger A. Arnold 10th edition

All the combinations, or bundles, of two goods a person can purchase, given a certain money income and prices for the two goods.

The equilibrium that occurs when the consumer has spent all income and the marginal utilities per dollar spent on each good purchased are equal: MUA/PA = MUB/PB = . . . = MUZ/PZ, where the letters A-Z represent all the goods a person buys.

The observation that things with the greatest value in use sometimes have little value in exchange and things with little value in use sometimes have the greatest value in exchange.

The curve that represents an indifference set and that shows all the bundles of two goods giving an individual equal total utility.

A map that represents a number of indifference curves for a given individual with reference to two goods.

A group of bundles of two goods that give an individual equal total utility.

Comparing the utility one person receives from a good, service, or activity with the utility another person receives from the same good, service, or activity.

The marginal utility gained by consuming equal successive units of a good will decline as the amount consumed increases.

The amount of one good an individual is willing to give up to obtain an additional unit of another good and maintain equal total utility.

The additional utility a person receives from consuming an additional unit of a good.

The total satisfaction a person receives from consuming a particular quantity of a good.

The principle whereby if A is preferred to B, and B is preferred to C, then A is preferred to C.

An artificial construct used to measure utility.

A measure of the satisfaction, happiness, or benefit that results from the consumption of a good.