28-AG0-2007 - Pay attention to page 56 & 57 footnote....

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Difference between wants and needs. Attitude of the consumer: o Trying to get the best quality product for the least amount of money. Equate the marginal utility of that product over its price. , where x is the price and p is the product. If there is a high marginal utility, you usually but it – several times if there is a high marginal utility. o Look for generic products. o Consumer also uses marginal utility to compare a product that they hadn’t thought about it. They are in equilibrium when they: . o Indifference curve: Connects combinations of two different products whose combined utility leads you indifferent. You do not care if you are asked to choose between two products. Either combination will make the consumer exactly happy. Use figure 3-1 in page 53. If someone prefers one combination over the other then that is not in the indifference curve.
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The indifference curve is convex to the origin because the
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28-AG0-2007 - Pay attention to page 56 & 57 footnote....

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