consumer surplus

Consumer surplus: The difference between the total value to the consumer of consuming a specific amount of a good and the amount the consumer must pay for that amount of the good.

Diminishing marginal utility: As a consumer purchases more of a good in a specific time period, the additional satisfaction enjoyed from the additional unit of the good will diminish.

Marginal analysis: A consumer will maximize his or her total well-being if the last dollar spent on each good provide the same marginal (additional) utility.

Marginal utility: The change in total utility or satisfaction resulting from consuming one more unit of a good or service.

Real income: Income adjusted for price changes. A measure of the amount of goods and services one can purchase.

Total utility: The total amount of satisfaction enjoyed from consuming a specific amount of a good or service.

Utility: The satisfaction gained from consuming a good or service.