Econ Midterm#2

Front 1

Consumption Bundle

Back 1

The set of all the goods and services an individual consumes

Front 2

Utility

Back 2

Measure of satisfaction of the consumer derives from the consumption of goods and services

Front 3

Utility Function

Back 3

The relationship between an individuals consumption bundle and total amount of utility it generates for that individual

Front 4

Marginal Utility

Back 4

The change in total utility from consuming an additional unit

Front 5

Marginal Utility curve

Back 5

Shows how marginal utility depends on the quantity of a good or service consumed

Front 6

Budget constraint

Back 6

The cost of a consumers consumption bundle is no more than the consumers total income

Front 7

Marginal Utility Curve

Back 7

Shows how marginal utility depends on the quantity of a good or service consumed

Front 8

Principle of diminishing utility

Back 8

Each successive unit of a good or service consumed adds less to that total utility than the previous unit

Front 9

Budget Line

Back 9

Line that shows the consumption bundles available to a consumer who spends all of his/her income

Front 10

Consumption Possibilities

Back 10

The set of all consumption bundles that he/she can consume given the condumers income and prevailing prices