Chapter_7 - Ch.7 Consumerchoice:Utilityanddemand Budget...

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    Ch. 7 Consumer choice: Utility and demand Budget Preferences Choice
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    Consumption Possibilities A household’s consumption possibilities are constrained  by its budget and the prices of the goods and services it  buys A budget line  describes the limits to a household’s  consumption choices A relative price  is the price of one good divided by the  price of another good A household’s real income  is the household’s income  expressed as the quantity of goods that the household  can afford to buy
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    Preferences and Utility Preferences A household’s preferences determine the benefits or  satisfaction a person receives consuming a good or service The benefit or satisfaction from consuming a good or service  is called utility
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    Utility is the key concept for understanding why  individual demand curves slope down to right
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This note was uploaded on 09/25/2010 for the course ECON ECON 1000 taught by Professor Noordeh during the Fall '09 term at York University.

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Chapter_7 - Ch.7 Consumerchoice:Utilityanddemand Budget...

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