Individual economic decision making

What’s consumer utility?

The total satisfaction received from consuming a good or service.

What is marginal utility?

The extra satisfaction derived from consuming one extra unit of the good.

What is altruism?

The selfless and disinterested concern towards the wellbeing of others.

What is Anchoring bias?

Individuals tend to rely on the first piece of information they are given.

What is bounded rationality?

Individuals inability to make rational economic decision making do to imperfect information, time constraints and limited metal processing ability.

Who is the economic man (Homo economics)?

A hypothetical person who behaves in exact accordance with their rational self-interest.

What is utility maximisation?

When consumers aim to make their personal welfare as high as possible.