Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
11 Cards in this Set
- Front
- Back
|
Budget constraint
|
defined by the income available for consumption and the prices that a consumer faces. this constraint defines the feasible set of consumption choices facing a consumer
|
|
|
Consumption bundles
|
Quantities of various goods or services that a consumer might consume
|
|
|
Disposable income
|
Personal income after the payment of tax obligations
|
|
|
Engel's Law
|
as disposable income of a consumer increases, the percentage of income spent for food decreases if all other factors constant
|
|
|
Indefference curve
|
A graph of the locus of consumption bundles that provide a consumer a given level of satisfaction
|
|
|
Law of diminishing marginal utility
|
Marginal utility declines as more of a good or service is consumed during a specific period of time
|
|
|
Marginal rate of substitution
|
the rate of substitution or trade-off between two imputs in the production of a specific products; also represents the slope of an isoquant curve
|
|
|
Marginal utility
|
the change to utility or satisfaction as consumption of a good is increased by one unit
|
|
|
Total utility
|
the total satisfaction derived from consuming a given bundle of goods and services
|
|
|
Utility Function
|
a mathematical or functional representation of the satisfaction a consumer derives from a consumption bundle
|
|
|
utils
|
imaginary unit of satisfaction derived from consumption of goods and services
|
