ECO 3rd Exam Notes

ECO 3rd Exam Notes - Lynda Wenrich Eco 012 MWF 12-12:50 Dr...

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Lynda Wenrich Eco 012 MWF 12-12:50 Dr. Esposto Economics of Consumer Behavior Willing: Utility- happiness/satisfaction; Assumption: max utility Total Utility- total amount of happiness from a specific quantity of a good Ex: 2 slices of pizza Marginal Utility- additional utility from more of a good Ex: 3 slices of pizza Ex: util= level of happiness Q DVD’s Total Utility 0 0 1 10 2 18 3 24 4 28 5 30 6 31 Able: -What you can afford is budget constraint Factors: 1) income 2) prices ex: income= $200 Prices: Beer= $20/case Pretzels=$2/bag (Budget Constraint)- all combinations of what you can afford to buy; also shows opportunity costs; -If the price of pretzels ↑ $2.40/bag= 4 beer & 50 pretzels; If income changes to ↓ $180 then 4 beers and 50 pretzels; -price change= change in income Q Pretzels Q Beer 0 10 10 9 20 8 30 7 40 6 50 5 60 4 70 3 80 2 90 1 100 0 P→(Income Effect)→ Q P→(Income Effect)→ Q
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Lynda Wenrich Eco 012 MWF 12-12:50 Dr. Esposto
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ECO 3rd Exam Notes - Lynda Wenrich Eco 012 MWF 12-12:50 Dr...

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