101chapter5 - Chapter 5 Consumer Choice Utility Consumer...

Info icon This preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
13:00 Chapter 5. Consumer Choice Utility Consumer surplus Budget Constraints Indifference Curves
Image of page 1

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

View Full Document Right Arrow Icon
13:00 13:00 2 I. Utility Analysis what is utility? benefit you get from consuming a good determined by your tastes/preferences (assume these are stable)
Image of page 2
13:00 13:00 3 total utility (TU) total benefit from consuming good example total benefit from 3 cookies
Image of page 3

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

View Full Document Right Arrow Icon
13:00 13:00 4 TU increases as consumption increases, to a point < TU 2 cookies TU 3 cookies
Image of page 4
13:00 13:00 5 marginal utility (MU) change in TU from consuming one more of a good example how much MORE utility from an additional pack of gum?
Image of page 5

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

View Full Document Right Arrow Icon
13:00 13:00 6 change in TU from 0 to 1 cookie change in TU from 1 cookie to 2 cookies MU of 1 st cookie MU of 2 nd cookie = = 0
Image of page 6
13:00 13:00 7 diminishing marginal utility MU falls as consumption rises get sick of cookies
Image of page 7

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

View Full Document Right Arrow Icon
13:00 13:00 8 MU of 1 st cookie > MU of 2 nd cookie 0
Image of page 8
13:00 13:00 9
Image of page 9

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

View Full Document Right Arrow Icon
13:00 13:00 10 How to maximize TU?
Image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern