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Unformatted text preview: 3. Total utility: Total amount of satisfaction derived from the consumption of a certain number of goods and service; Marginal utility: Extra satisfaction generated by consumption of an additional good or service during a specific time period; The increase in total utility from each additional unit is less than the unit before, which indicates the marginal utility; Diminishing marginal utility: An individual consumers more and more of a good, each successive unit generate less and less utility; 10.2 1. Consumer equilibrium: Allocation of consumer income that balance the ratio of marginal utility to the price of goods purchase; MU /P =MU /P =MU /P =MU/P...
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This note was uploaded on 02/10/2011 for the course ECO 2251 taught by Professor Kirkland during the Spring '09 term at Troy.
- Spring '09