Ag Econ Chapter 5

Ag Econ Chapter 5 - end of chapter 4 notes price ceiling...

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end of chapter 4 notes price ceiling queuing direct rationing black markets investment dries up Chapter 5 tastes and preferences – independent of price and budget, so everything else besides that can be manipulated in some ways, and in some ways, not so easily manipulated customer utility = satisfaction diminishing marginal utility = there is a decline in price as more of a good is consumed. you will pay more for the first food item if you are starving than the fifth one. totally utility – the most you will pay for a good or service marginal analysis – benefits and costs associated with consuming or producing last unit of something Marginal utility – figure out the differences between these and if it is intelegent to produce Q Total Utility Marginal Utility 0 0 1 6 6 2 11.6 5.6 3 16.00 4.4 4 19.6 3.6 5 21.4 1.8 6 22.2 .8 7 22.6 .40 8 22.6 0 graph this and tell what that says to you “what’s the story” quantity is on the bottom Price = Marginal utility you would by 4 burgers because after that the marginal utility is less than the price. Bananas (on the slides)
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This note was uploaded on 04/07/2008 for the course AREC 202 taught by Professor Dalstead during the Spring '08 term at Colorado State.

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Ag Econ Chapter 5 - end of chapter 4 notes price ceiling...

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