Principles of Consumer Utility and Preferences

<p>A curve showing consumption bundles that give the consumer the same level of satisfaction (C)</p> Signup and view all the answers

<p>Higher indifference curves are preferred to lower ones (B)</p> Signup and view all the answers

<p>Each additional unit adds less to utility than the previous unit (C)</p> Signup and view all the answers

<p>What consumers want and prioritize among different options (D)</p> Signup and view all the answers

<p>A consumer’s preference among consumption bundles that give the same level of satisfaction (A)</p> Signup and view all the answers

<p>As one good increases, the other decreases to maintain constant satisfaction level (B)</p> Signup and view all the answers

<p>It contradicts the principle that higher indifference curves are preferred to lower ones (B)</p> Signup and view all the answers

<p>Combinations of goods and services available for purchase by consumers (B)</p> Signup and view all the answers

<p>Property 4: Indifference curves are bowed inward (convex to origin) (B)</p> Signup and view all the answers

<p>The rate at which a consumer is willing to trade one good for another (A)</p> Signup and view all the answers

<p>At the point where the highest indifference curve and the budget constraint are tangent (C)</p> Signup and view all the answers

<p>MUA/PA= MUB/PB= …. = MUZ/PZ (subject to budget constraints) for all goods (D)</p> Signup and view all the answers

<p>Causes it to shift to the right (and vice versa) (A)</p> Signup and view all the answers

<p>The consumer's valuation of goods equals the market's valuation at their optimum (D)</p> Signup and view all the answers

<p>People are more willing to trade away goods that they have in abundance and less willing to trade away goods of which they have little (C)</p> Signup and view all the answers

<p>Consumption bundles that give the consumer the same level of satisfaction (B)</p> Signup and view all the answers

<p>The change in utility from consuming one additional unit of a good (C)</p> Signup and view all the answers

<p>Marginal utility diminishes over time (B)</p> Signup and view all the answers

<p>People are willing to trade away goods to reach higher indifference curves (B)</p> Signup and view all the answers

<p>The rate at which the consumer is willing to substitute one good for another while maintaining the same level of satisfaction (A)</p> Signup and view all the answers

<p>'Consumption bundles' refer to different combinations of goods and services that a consumer can afford with their income (D)</p> Signup and view all the answers

<p>Each additional unit of a good adds less to utility than the previous unit (B)</p> Signup and view all the answers

<p>Consumer optimum occurs when the highest possible indifference curve is tangent to the budget constraint. (A)</p> Signup and view all the answers

<p>A change in income shifts or pivots the budget constraint parallelly. (D)</p> Signup and view all the answers

<p>It lies on the highest possible indifference curve and within budget constraints. (A)</p> Signup and view all the answers

<p>They signify that as more of one good is consumed, less of another good must be consumed to maintain constant satisfaction. (A)</p> Signup and view all the answers

<p>Consumption bundles that give the consumer the same level of satisfaction (D)</p> Signup and view all the answers

<p>Consumers prefer more of a good to less (D)</p> Signup and view all the answers

<p>Each additional unit adds less to utility than the previous unit (B)</p> Signup and view all the answers

<p>The marginal rate of substitution (A)</p> Signup and view all the answers

<p>MUA/PA = MUB/PB = ... = MUZ/PZ (subject to budget constraints) for all goods (B)</p> Signup and view all the answers

<p>Shifts the budget constraint (D)</p> Signup and view all the answers

<p>Each additional unit adds less and less extra satisfaction (D)</p> Signup and view all the answers

<p>The consumer's optimal choice is reached (D)</p> Signup and view all the answers

<p>'Consumption bundles' refers to different combinations of goods and services that a consumer can afford given their income and prices of goods. (B)</p> Signup and view all the answers

<p>It indicates that both combinations are equally preferred by consumers. (B)</p> Signup and view all the answers

<p>Indifference curves are downward sloping. (C)</p> Signup and view all the answers

<p>Property 1: higher indifference curves are preferred to lower ones. (A)</p> Signup and view all the answers

<p>At the point where the highest indifference curve and the budget constraint are tangent. (C)</p> Signup and view all the answers

<p>Indifference curves are bowed inward (convex to origin). (A)</p> Signup and view all the answers

<p>Diminishing marginal utility (C)</p> Signup and view all the answers

<p>Consumer preference among consumption bundles (B)</p> Signup and view all the answers

<p>Higher indifference curves are preferred to lower ones (C)</p> Signup and view all the answers

<p>The marginal rate of substitution (B)</p> Signup and view all the answers

<p>More willing to trade away goods they have in abundance (D)</p> Signup and view all the answers

<p>Consumers usually prefer more of something to less of it (D)</p> Signup and view all the answers

<p>Shifts the budget constraint (D)</p> Signup and view all the answers

<p>Consumer preferences for combinations of goods (A)</p> Signup and view all the answers

<p>At the point where the highest indifference curve and the budget constraint are tangent (C)</p> Signup and view all the answers

<p>Combinations of goods that provide a certain level of satisfaction (A)</p> Signup and view all the answers

<p>MUA/PA = MUB/PB = ... = MUZ/PZ (subject to budget constraints) for all goods (B)</p> Signup and view all the answers

<p>The consumer's optimal choice is achieved (B)</p> Signup and view all the answers

<p>Each additional unit provides less extra satisfaction than the previous one (A)</p> Signup and view all the answers

<p>They are negatively sloped (D)</p> Signup and view all the answers

<p>The marginal rate of substitution (B)</p> Signup and view all the answers

<p>Higher indifference curves are preferred to lower ones (B)</p> Signup and view all the answers

<p>The consumer's optimal choice is reached (C)</p> Signup and view all the answers

<p>Indifference curves are downward sloping (C)</p> Signup and view all the answers

<p>At the point where the highest indifference curve and budget constraint are tangent (A)</p> Signup and view all the answers

<p>Each additional unit provides less extra satisfaction than the previous one (C)</p> Signup and view all the answers

<p>Indifference curves are bowed inward (convex to origin) (C)</p> Signup and view all the answers

<p>Shifts it parallel to itself (D)</p> Signup and view all the answers

<p>Different combinations of goods that a consumer can afford given income and prices (D)</p> Signup and view all the answers

<p>It decreases as more of a good is consumed (D)</p> Signup and view all the answers