Class Notes - 10-3-07

# Class Notes - 10-3-07 - Microeconomics Class Notes Marginal...

This preview shows pages 1–2. Sign up to view the full content.

Microeconomics – Class Notes – 10/3/07 Marginal Benefit is the WTP for one additional unit. Utility is the satisfaction that results from consumption. We only care about “marginal” decisions for the rest of the semester D. Marginal Utility - Utility value from one additional unit of consumption - Marginal Utility EQUATION : (Change in Utility divided by the Change in Quantity) (Change In U) / (Change in Q) - Marginal Utility is the Increase in utility from the last unit of consumption. Quantity Utilitiy Marginal Utility 0 0 ------------------------------ 1 70 70 (70 – 0) 2 120 (120 – 70) / (2-1) = 50 3 160 40 Always start at “0,” even though the table will start usually with “1” because “0” is always assumed. Quantity Utility (Total) Marginal Utility 0 0 0 1 10 10 2 15 5 3 18 3 4 20 2 5 21 1 Total Utility is very similar to Utility with the exception that Utility is unitless whereas WTP is expressed in dollar amounts. o

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 04/15/2008 for the course ECON 100 taught by Professor Stephaniemartin during the Fall '07 term at Allegheny.

### Page1 / 4

Class Notes - 10-3-07 - Microeconomics Class Notes Marginal...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online