Chap005.2 - Translating Wants Into Demand What should Sarah...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
2 Chapter 5: Demand: The Benefit Side of the Market Slide 7 Translating Wants Into Demand ± What should Sarah do when she gets to the front of the line? ± Is the time spent in the line relevant to how many cones to order? Chapter 5: Demand: The Benefit Side of the Market Slide 8 Sarah’s Total Utility and Marginal Utility from Ice Cream Consumption Cone quantity Total utility Marginal utility (cones/hour) (utils/hour) (utils/cone) 00 15 0 29 0 31 2 0 41 4 0 51 5 0 61 4 0 50 40 30 20 10 -10 __ Chapter 5: Demand: The Benefit Side of the Market Slide 9 Sarah’s marginal utility Diminishing Marginal Utility Cones/hour Utils/cone 13 4.5 0 1.5 0.5 4 3.5 2.5 2 50 40 30 20 10 Chapter 5: Demand: The Benefit Side of the Market Slide 10 Translating Wants into Demand ± The Law of Diminishing Marginal Utility z The tendency for the additional utility gained from consuming an additional unit
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/20/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.

Ask a homework question - tutors are online