Utility theory
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4 Terms
1
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define margional.
the extra utility gained from consuming an extra unit.
2
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where is total utility maximised
where margional utility is 0
3
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where would a rational consumer maxemise their utility
where margional utility is the price of the good.
4
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what happens when quantity consumed increases
the increase in marginal utility derived from each extra unit falls
Note 
Flashcards (20)