student athlete playing golf I am constantly juggling my time between my studies as a senior Economics major‚ and maximizing my golfing potential and chasing my ultimate dream of becoming a professional golfer. Throughout this paper I will explain how I maximize my utility in different circumstances using the labor-leisure model. As I am not actively looking for work in the labor market my indifference curve is so steep there are no tangencies to my reservation wage‚ which is defined as the “lowest
Premium Economics Consumer theory Microeconomics
Chapter 2 1. A consumer prefers more to less of every good. Her income rises‚ and the price of one of the goods falls while other prices stay constant. These changes must have made her better of. TRUE 2. A decrease in income pivots the budget line around the bundle initially consumed. FALSE 3. If all prices are doubled and money income is left the same‚ the budget set does not change because relative prices don ’t change. FALSE 4. If all prices double and income triples‚ then the
Premium Consumer theory Preference Utility
substitute (Marginal Rate of Substitution) Slope of indifference curve= the amount of a product that must be substitute for another if utility is to remain unchanged. The ratio is the marginal rate of substitution. The MRS is the slope of the indifference curve at a certain point. I spend my money on the product that gave the most marginal utility. Ex: How much X do I have to give to get an extra unit of Y ? Example of indifference curves= If my MRS does not depend on
Premium Consumer theory Utility Preference
the cardinal approach 5.6 Consumer’s surplus 5.7 The ordinal utility approach to consumer behaviour: the indifference curve approach 5.8 Consumer’s budget constraint 5.9 Consumer’s equilibrium in the ordinal utility approach 5.10 Special cases 5.11 Price-consumption curve 5.12 Income-consumption curve 5.13 Price‚ substitution‚ and income effects 5.14 Derivation of the demand curve for a good 5.15 Inferior goods and Giffen goods 5.16 Let us sum up 5.17 Some key words 5.18 Some useful
Premium Consumer theory Supply and demand
Micro-Economics Report of Microeconomics Submitted by: Sultan Lashari 10 2629 Submitted To: SIR MICHAEL SIMON Program: BACHELORS OF BUSINESS ADMINISTRATION FALL 2010 ------------------------------------------------- National University of Computer & Emerging Science Management
Free Utility Consumer theory Economics
Teaching Notes Now we step back from supply and demand analysis to gain a deeper understanding of what lies behind the supply and demand curves. It will help students understand where the course is heading if you explain that this chapter builds the foundation for deriving demand curves in Chapter 4‚ and that you will do the same for supply curves later in the course (beginning in Chapter 6). It is important to explain that economists approach behavior somewhat differently than‚ say‚ psychologists
Premium Utility Preference Consumer theory
II. TU increases so long as MU is positive. III. When MU is zero‚ TU is maximum IV. When MU is negative‚ TU is diminishing. * The exponents of the utility analysis have developed two laws which occupy a very important place in economics theory and they are :- # Law of Diminishing Marginal Utility # Law of Equi-Marginal Utility Law of Diminishing Marginal Utility The additional benefit a person derives from a given increase of his stock of a thing diminishes with every
Premium Utility Consumer theory Economics
Introduction Consumer Behavior is how consumers allocate their money incomes among goods and services. Each consumer has preferences for certain of the goods and services that are available in the market. Buyers also have a good idea of how much marginal utility they will get from successive units of the various products they might purchase. However‚ the amount of marginal & total utility that the people will get will be different for every individual in the group because all individuals have
Premium Consumer theory
using an instrument called utilometer ‚however some economics have suggested that utility can be measured in monetary units by the amount of money offered for a commodity. On the other hand the ordinal utility approach which argues that a consumer can’t measure satisfaction numerically or subjectively. The ordinal utility is also commonly known as indifference curve theory because its analysis is based on on indifference curve. Indifference curves are psychological levels of satisfaction hence are
Premium Utility
Economics 339‚ A01‚ CRN 12913 Assignment 2 Dr. L. Welling November 16‚ 2012 Assignments are due at the beginning of class on the due date. Remember to use at least ½ page for each diagram. 1. (25 marks) Juanita derives utility from both leisure (L) and food (G). She has 18 hours per day which she can divide between leisure and preparing meals (H). Her ability to prepare meals is described by the function G=g(H;X)‚ and displays positive but diminishing marginal productivity of H. a) (4 marks) In a
Premium Consumer theory Economics Microeconomics