TAILIEUCHUNG - Lecture Economics - Chapter 6: Consumer choice theory

In this chapter, you will learn to solve these economic puzzles: Do white rats obey the law of demand? Under what conditions might you be willing to pay $10,000 for a gallon of water and 1 cent for a one-carat diamond? When ordering Big Macs, milkshakes, pizza, and other goods, how can you obtain the highest possible satisfaction? | Chapter 6 Consumer Choice Theory ©2000 South-Western College Publishing Key Concepts Summary Practice Quiz Internet Exercises * In this chapter, you will learn to solve these economic puzzles: Under what conditions might you be willing to pay $10,000 for a gallon of water and 1 cent for a one-carat diamond? When ordering Big Macs, milkshakes, pizza, and other goods, how can you obtain the highest possible satisfaction? Do white rats obey the law of demand? * What is Util? A hypothetical unit used to measure how much utility a person obtains from consuming a good * What is Utility? The satisfaction, or pleasure, that people receive from consuming a good or service * What is Total Utility? The amount of satisfaction received from all the units of a good or service consumed * Why does a consumer buy one bundle of goods, rather than another? Consumers make one choice over another depending on their marginal utility * What is Marginal Utility? The change in total utility from one additional unit of a good or service * What is the Law of Diminishing Marginal Utility? The principle that the extra satisfaction of a good or service declines as people consume more in a given period * 8 6 4 2 1 2 3 4 Diminishing Marginal Utility MU Marginal Utility Q * 16 12 8 4 1 2 3 4 Total Utility TU Utils Q * When is Total Utility maximized? When the marginal utility per dollar of each good is equal and the entire budget is spent * What is Consumer Equilibrium? A condition in which total utility cannot increase by spending more of a given budget on one good and spending less on another good * Even though water provides a greater utility than diamonds, why are diamonds more expensive? Water is plentiful in most of the world, so its marginal utility is low * 8 6 4 2 1 2 3 4 Marginal Utility of Diamonds MU Q Marginal Utility S MUd * 8 6 4 2 1 2 3 4 Marginal Utility of Water MU Q Marginal Utility S MUw * Marginal Utility for Big .

• Kinh tế học
• Lecture Economics
• Consumer choice theory
• Total utility
• Marginal utility
• Consumer equilibrium
• Total utility maximized
• Business economics
• Lecture Business economics
• Business applications of economics
• Open economy
• Competitive markets
• Economic Models
• Economics of agriculture
• Development economics
• Lecture Development economics
• Kinh tế phát triển
• Economic growth
• Developing nations
• Economics of agricultural development
• Principles of economics
• Managerial economics
• Lecture Managerial economics
• Market interactions
• Fundamentals of managerial economics
• Marginal analysis
• Marginal benefit
• Lecture Principles of economics
• Ten principles of economics
• People face tradeoffs
• Opportunity cost
• Marginal changes
• Element of economics
• Lecture Element of economics
• Economic systems
• Economics problems
• Macroeconomic issues
• Economics of information
• Consumer choice
• Free rider problem
• Market transactions
• Economic principles
• Economic policies
• Economics of farm policy
• Farm policy
• Social issues
• Economics of social issues
• Lecture Economics of social issues
• Economics of crime
• Classification of criminal acts
• The costs of crime
• Economics of education
• Increased demand for education
• Educational expenditures
• Monopoly power
• Economics of monopoly power
• Professional sports
• Economics of professional sports
• Professional sports business
• Issues in economics today
• Lecture Issues in economics today
• International issues
• Price control issues
• Economics of children
• Public economics
• Kinh tế học
• Foreign markets
• Monopolistic competition
• Macroeconomic policy
• Supply curve
• Elasticity of demand