Lecture 9 slides notes

Lecture 9 slides notes - Lecture 09 EC1000 20 October 2009...

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Lecture 09 20 October 2009 EC1000 A. Cohen 1 E C O N O M I C S PARKIN BADE Lecture 9 20 October 2009 E C O N O M I C S PARKIN BADE Chapter 8 Utility and Demand Maximizing Utility Utility key concept for understanding why individual demand curves slope down to right Utility Individual Demand Market Demand Total Utility ( TU ) total benefit or satisfaction from all units consumed consumption TU continued
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Lecture 09 20 October 2009 EC1000 A. Cohen 2 150 225 0 1 2 3 4 5 Q Utility TU Figure 8.1a Total Utility Marginal Utility ( MU ) additional satisfaction from additional unit consumed diminishing marginal utility — MU positive, but as consumption MU = slope TU (= Δ TU ) 0 1 2 3 4 5 Utility 75 Q MU Figure 8.1b Marginal Utility
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Lecture 09 20 October 2009 EC1000 A. Cohen 3 0 1 2 3 4 5 Utility 75 …and diminishing marginal utility 75 150 225 0 1 2 3 4 5 Q Utility Increasing total utility. .. Q
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Lecture 9 slides notes - Lecture 09 EC1000 20 October 2009...

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