EGC1 Study Guide
marginal utility?
Utility: The want-satisfying power of a good or service; the satisfaction or pleasure a consumer obtains from the consumption of a good or service (or from the consumption of a collection of goods and services).
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Marginal Utility: The extra utility a consumer obtains from the consumption of 1 additional unit of a good or service; equal to the change in total utility divided by the change in the quantity consumed.
The customer will buy more units if they get extra satisfaction
The customer will buy fewer units if they get less satisfaction
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diminishing marginal utility?
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Diminishing Marginal Utility: person gets less satisfaction for each unit consumed then the first or prior units.
Marginal resource Cost (MRC)
The amount the total cost of employing a resource increases when a firm employs 1 additional unit of the resource (the quantity of all other resources employed remaining constant); equal to the change in the total cost of the resource divided by the change in the quantity of the resource employed.
Marginal cost is the extra, or additional, cost of producing one more unit of output. It is the amount by which total cost and total variable cost change when one more or one less unit of output is produced.
Fixed costs are those costs that do not vary with changes in output.
Variable costs are those costs that change with the level of output.
Total Cost is the sum of fixed cost and variable cost at each level of output:
But when, as diminishing returns are encountered, marginal product begins to decline, larger and larger additional amounts of variable resources are needed to produce successive units of output. Total variable cost therefore increases by increasing amounts.
P166
Marginal revenue is the change in total revenue (or the extra revenue) that results from selling one more unit of output.
change to the total revenue
Marginal revenue is the change in total revenue (or the extra revenue) that results
Utility: The want-satisfying power of a good or service; the satisfaction or pleasure a consumer obtains from the consumption of a good or service (or from the consumption of a collection of goods and services).
•
Marginal Utility: The extra utility a consumer obtains from the consumption of 1 additional unit of a good or service; equal to the change in total utility divided by the change in the quantity consumed.
The customer will buy more units if they get extra satisfaction
The customer will buy fewer units if they get less satisfaction
•
diminishing marginal utility?
•
Diminishing Marginal Utility: person gets less satisfaction for each unit consumed then the first or prior units.
Marginal resource Cost (MRC)
The amount the total cost of employing a resource increases when a firm employs 1 additional unit of the resource (the quantity of all other resources employed remaining constant); equal to the change in the total cost of the resource divided by the change in the quantity of the resource employed.
Marginal cost is the extra, or additional, cost of producing one more unit of output. It is the amount by which total cost and total variable cost change when one more or one less unit of output is produced.
Fixed costs are those costs that do not vary with changes in output.
Variable costs are those costs that change with the level of output.
Total Cost is the sum of fixed cost and variable cost at each level of output:
But when, as diminishing returns are encountered, marginal product begins to decline, larger and larger additional amounts of variable resources are needed to produce successive units of output. Total variable cost therefore increases by increasing amounts.
P166
Marginal revenue is the change in total revenue (or the extra revenue) that results from selling one more unit of output.
change to the total revenue
Marginal revenue is the change in total revenue (or the extra revenue) that results