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are individual evaluations of goods and services
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Consumer preferences
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the sense of pleasure or satisfaction derived from consuming goods and services
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Utility is
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tastes and preferences
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Utility is determined by an individual's
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of the total utility gained from consuming an extra unit of a good
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Marginal utility is a measure
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marginal utility eventually declines
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The law of diminishing marginal utility states that as you consume more and more of a good, other things constant,
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The marginal utility of the last doughnut was negative
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"I don't feel so good. I shouldn't have had that last doughnut" Which statement best describes this situation?
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marginal utility and total utility
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Joe the Economists tells his wife, Jane, that he wants to spend a weekend fishing with his friends. She replies, " You don't love me anymore." Just before she hits Joe with a croquet mallet, Joe explains to her that she has confused the concepts of
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are exactly proportional to their market prices
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A consumer maximizes utility when the marginal utilities of all goods
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0
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Suppose you go to a wedding reception that has free drinks. What is likely to be the marginal utility of the last drink you had?
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income and product prices must both be considered in utility maximization
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As long as scarcity exists,
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maximizing total utility
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When a consumer spends income so that the ratio of marginal utilities (MUs) of all goods purchased equals the ratio of their prices, the consumer is
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the popcorn, whether he has the $50 or not
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Suppose that for Jason the marginal utility of $50-per-serving caviar is 100 and the marginal utility of $1-per-serving popcorn is 10. For his snack, Jason should buy
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eating more twinkles but enjoying them less
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The law of diminishing marginal utility may be illustrated by a person
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the MU/P of milk must be greater than that of ice cream
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IF by purchasing a little more milk and a little less ice cream you could increase your total utility
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the price of cheese and hold other things constant
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In order to derive a demand curve for cheese, we would change
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the price of the good itself
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Which of the following varies along a given demand curve
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law of demand
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Suppose Lorna will buy more sweaters if the price of sweaters rises. She is violating the..
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marginal utility rather than total utility
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The diamonds-water paradox can be resolved by focusing on
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people who buy bottled water apparently feel the additional benefit (compared with tap water) offsets the additional cost
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According to the theory of utility maximization,
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may be greater than or equal to but not less than its price
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If you buy a good, its expected marginal value to you
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consumer surplus
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the difference between the maximum amount that a consumer is willing to pay for a given amount of a good and the amount that the consumer actually pays
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increases
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When price decreases, consumer surplus
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Ford gets no consumer surplus
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Suppose Ford truthfully tells the car dealer the maximum amount he is willing to par for a Mustang: $20,000. The dealer says, "You're in luck; we have one on the lot for $20,000. Which is the following statements is true?
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reduces their utilization of health care without compromising their health
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Requiring Medicare participants to pay a small fraction of the cost of their medical care
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