Ch. 21 Consumer Choice

Ch. 21 Consumer Choice - Chapter 21 The Theory of Consumer...

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Chapter 21 The Theory of Consumer Choice Why are we covering only some sections instead of the entire chapter? Which sections? o Pages 458-459, “The Budget Constraint: What the Consumer Can Afford” o “FYI” Box on Page 465 o Page 479, “Conclusion: Do People Really Think this Way?”
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“utility” What do economists mean by the term “utility”? (see box on page 465) Can we measure utility? What creates utility? Does anything destroy utility? Or create the opposite of utility? How do economists use this concept?
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“marginal utility” Review from Chapter 1: what does marginal mean? What happens to utility as a person consumes more and more of a good in the same time period? How does this look on a graph?
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What does that last graph look like? The law of demand says: _____________ The principle of diminishing marginal utility says: _________________ Does marginal utility ALWAYS diminish? Do we really need the principle of
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Ch. 21 Consumer Choice - Chapter 21 The Theory of Consumer...

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