Ch. 3&4 Vocab

Ch. 3&4 Vocab - CHAPTER 3 Budget constraint-defined by the...

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

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: CHAPTER 3 Budget constraint-defined by the income available for consumption and the prices that a consumer faces Consumption bundles-quanitities of various goods or services that a consumer might consume Disposable income-personal income after the payment of tax obligations Engel’s Law-as disposable income of a consumer increases, the percentage of income spent for food decreases if all other factors remain constant Indifference curve-a graph of the locus of consumption bundles that provide a consumer a given level of satisfaction Law of diminishing marginal utility-marginal utility declines as more of a good/service is consumed during a specified period of time Marginal rate of substitution-the rate of exchange of pairs of consumption goods or services to leave utility or satisfaction unchanged Marginal utility-the change of utility or satisfaction as consumption of a good increases by one unit Total utility-the total satisfaction derived from consuming a given bundle of goods and services...
View Full Document

This note was uploaded on 03/30/2008 for the course ECON 105 taught by Professor Nayga during the Spring '08 term at Texas A&M.

Page1 / 2

Ch. 3&4 Vocab - CHAPTER 3 Budget constraint-defined by the...

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

View Full Document Right Arrow Icon
Ask a homework question - tutors are online