Chapter 6

Front 1

utility

Back 1

deeotes satisfaction, a subjective pleasure that an individual can derive form consuming a good or service

Front 2

the law of diminishing marginal utility

Back 2

states that each successive incremental improvement in health generates less and less additions to total utility

Front 3

consumer's equilibrium

Back 3

if total utility is maximized with regard to his income

Front 4

the indifference curve

Back 4

a curve which shows the different combinations of Good X aondd Good Y which yield the same level of utility

Front 5

marginal rate of substitution

Back 5

amount of Good Y that a consumer is willing to give up in exchange for Good X and still lie on the same indifference curve

Front 6

budget line

Back 6

shows the different combinations of Good X and Good Y that a consumer can purchase given his income and the prices of goods

Front 7

income consumption curve

Back 7

defined as a collection of points of consumers equilibrium resulting from varying income

Front 8

Engel curve

Back 8

shows the amount of commodity that the consumer would buy per unit of time at different levels of income

Front 9

price consumption curve

Back 9

collection of points of consumer's equilibrium resulting from varying the price of Good Y.