{"id":2471,"date":"2015-06-23T22:38:41","date_gmt":"2015-06-23T22:38:41","guid":{"rendered":"https:\/\/courses.candelalearning.com\/masterymicro1xngcxmaster\/?post_type=chapter&p=2471"},"modified":"2015-12-17T19:45:22","modified_gmt":"2015-12-17T19:45:22","slug":"glossary-utility","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/chapter\/glossary-utility\/","title":{"raw":"Glossary: Utility","rendered":"Glossary: Utility"},"content":{"raw":"backward-bending supply curve for labor\u00a0<\/strong>the situation when high-wage people can earn so much that they respond to a still-higher wage by working fewer hours\r\n\r\nbehavioral economics\u00a0<\/strong>a branch of economics that seeks to enrich the understanding of decision-making by integrating\u00a0the insights of psychology and by investigating how given dollar amounts can mean different things to individuals\u00a0depending on the situation.\r\n\r\nbudget constraint line\u00a0<\/strong>shows the possible combinations of two goods that are affordable given a consumer\u2019s limited\u00a0income\r\n\r\nconsumer equilibrium<\/strong>\u00a0when the ratio of the prices of goods is equal to the ratio of the marginal utilities (point at which\u00a0the consumer can get the most satisfaction)\r\n\r\ndiminishing marginal utility<\/strong>\u00a0the common pattern that each marginal unit of a good consumed provides less of an\u00a0addition to utility than the previous unit\r\n\r\nfungible<\/strong>\u00a0the idea that units of a good, such as dollars, ounces of gold, or barrels of oil are capable of mutual substitution\u00a0with each other and carry equal value to the individual.\r\n\r\nincome effect<\/strong>\u00a0a higher price means that, in effect, the buying power of income has been reduced, even though actual\u00a0income has not changed; always happens simultaneously with a substitution effect\r\n\r\nmarginal utility per dollar<\/strong>\u00a0the additional satisfaction gained from purchasing a good given the price of the product;\u00a0MU\/Price\r\n\r\nmarginal utility<\/strong>\u00a0the additional utility provided by one additional unit of consumption\r\n\r\nsubstitution effect<\/strong>\u00a0when a price changes, consumers have an incentive to consume less of the good with a relatively\u00a0higher price and more of the good with a relatively lower price; always happens simultaneously with an income effect\r\n\r\ntotal utility<\/strong>\u00a0satisfaction derived from consumer choices","rendered":"

backward-bending supply curve for labor\u00a0<\/strong>the situation when high-wage people can earn so much that they respond to a still-higher wage by working fewer hours<\/p>\n

behavioral economics\u00a0<\/strong>a branch of economics that seeks to enrich the understanding of decision-making by integrating\u00a0the insights of psychology and by investigating how given dollar amounts can mean different things to individuals\u00a0depending on the situation.<\/p>\n

budget constraint line\u00a0<\/strong>shows the possible combinations of two goods that are affordable given a consumer\u2019s limited\u00a0income<\/p>\n

consumer equilibrium<\/strong>\u00a0when the ratio of the prices of goods is equal to the ratio of the marginal utilities (point at which\u00a0the consumer can get the most satisfaction)<\/p>\n

diminishing marginal utility<\/strong>\u00a0the common pattern that each marginal unit of a good consumed provides less of an\u00a0addition to utility than the previous unit<\/p>\n

fungible<\/strong>\u00a0the idea that units of a good, such as dollars, ounces of gold, or barrels of oil are capable of mutual substitution\u00a0with each other and carry equal value to the individual.<\/p>\n

income effect<\/strong>\u00a0a higher price means that, in effect, the buying power of income has been reduced, even though actual\u00a0income has not changed; always happens simultaneously with a substitution effect<\/p>\n

marginal utility per dollar<\/strong>\u00a0the additional satisfaction gained from purchasing a good given the price of the product;\u00a0MU\/Price<\/p>\n

marginal utility<\/strong>\u00a0the additional utility provided by one additional unit of consumption<\/p>\n

substitution effect<\/strong>\u00a0when a price changes, consumers have an incentive to consume less of the good with a relatively\u00a0higher price and more of the good with a relatively lower price; always happens simultaneously with an income effect<\/p>\n

total utility<\/strong>\u00a0satisfaction derived from consumer choices<\/p>\n\n\t\t\t

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Candela Citations<\/h3>\n\t\t\t\t\t
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