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Ag Econ Misc notes 1 - marginal utility/price vs quantity...

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Ag Econ – Extra notes If marginal utility is positive, the consumer must be buying too little – to maximize use total utility marginal utility – price = positive (not buying enough) no consumer will rationally purchase where the marginal utility is negative Q Marginal Utility Total utility Price Net Marginal Utility 0 -- 0 1 -- 1 6 6 1 5 2 4 10 1 3 3 3 13 1 2 4 2 15 1 1 5 1 16 1 0 Consumer surplus – amount above market price that will still be purchased
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Unformatted text preview: marginal utility/price vs quantity total utility is how much out of budget that is spent will spend until the marginal utility = price what impact will changes in consumer patterns affect taxes and the consumption shifts in taxes will change how consumers spend money Net marginal = marginal – price $6, 1 consumer surplus $1, 4 $2, 3 $3, 2...
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