Econ 208 Chapter 6 Terms

Front 1

Define Utility

Back 1

the satisfaction or well-being that a consumer receives from consuming some good or service

Hint 1

the _________ or _________ that a _________ receives from consuming some good or service

Front 2

Define Total Utility

Back 2

the total satisfaction resulting from the consumption of a given commodity by a consumer

Hint 2

the _____ __________ resulting from the consumption of a given commodity by a __________

Front 3

Define Marginal Utility

Back 3

the additional satisfaction obtained by a consumer from consuming one unit more of a good or service

Hint 3

the _________ __________ obtained by a _________ from consuming one unit more of a good or service

Front 4

What is the main goal of a utility-maximizing consumer?

Back 4

A utility-maximizing consumer allocates expenditures so that the utility obtained from the last dollar spent on each product is equal

Hint 4

A utility-maximizing consumer _________ expenditures so that the utility obtained from the____ _______ spent on each product is _______

Front 5

What is the condition (formula) required for a consumer to maximizing utility between two products?

Back 5

(MUx)/(Px) = (MUy)/(Py)

Hint 5

( _ _ x)/( _ x) = ( _ _ y)/( _ y)

Front 6

Define Real Income

Back 6

Income expressed in terms of the purchasing power of money income, that is, the services that can be purchased with the money income.

Front 7

Define Substitution Effect

Back 7

The change in quantity of a good demanded resulting from a change in its relative price (holding real income constant)

Front 8

Define Income Effect

Back 8

The change in the quantity of a good demanded resulting from a change in real income (holding relative prices constant)