utility

Question 1

utility

Answer 1

satisfcation derived from consuming a good

Question 2

marginal utility

Answer 2

the additional satisfaction derived from consuming an extra unit of a good

Question 3

maximise satisfcation

Answer 3

assume consumers aim to maximise utility when purchasing (rational choice theory)

Question 4

law of diminishing marginal utility

Answer 4

assumption that utility falls every additional unit of good consumed and the first consumption is the max utility
eventually the consumer switches to an alternative or stops

Question 5

limits to utility maximisation

Answer 5

limited budget
limited time
given set of prices - may switch to alternatives

Question 6

margin

Answer 6

the current state of the consumer before purchase (helps decide whether they will make a gain or loss)

Question 7

total utility

Answer 7

the aggregate satisfactiona consumer recieves
when total utility is max it is 0

Question 8

disutility

Answer 8

negative feelings/loss made from consuming a good
e.g. spam advertising, long queues, unhealthy foods

Question 9

total utility max

Answer 9

0
no extra satisfaction will occur