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Unformatted text preview: 2. Understand the difference between total and marginal utility. State the law of "diminishing marginal utility". Given different levels in total utility calculate the marginal utility. 3. Define what an indifference curve is and know its properties. 4. Define the marginal rate of substitution and understand its relationship with indifference curves. 5. Given total utility and relative prices for two goods calculate the quantities which will be consumed. (Utility maximization rule). 6. Be able to explain what the utility maximization rule implies in a budget constraint/indifference curve graph....
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This note was uploaded on 02/01/2008 for the course ECON 101 taught by Professor Hansen during the Spring '07 term at University of Wisconsin Colleges Online.
- Spring '07