ECON 1001 Chapter 5
Homework with
complete verified
solutions
law of demand - answer people do less of what they want to do as the cost of
doing it rises
terms of wants - answer economists like to emphasize that once we have
achieved
utility maximization - answer Assumption that people try to allocate their
incomes so as to maximize their satisfaction;
rises at a diminishing rate with additional consumption.
marginal utility - answer the additional utility gained from consuming an
additional unit of a good
law of diminishing marginal utility - answer the tendency for the additional
utility gained from consuming an additional unit of a good to diminish as
consumption increases beyond some point
optimal combination of goods - answer the affordable combination that
yields the highest total utility
rational spending rule - answer spending should be allocated across goods so
that the marginal utility per dollar is the same for each good;
Homework with
complete verified
solutions
law of demand - answer people do less of what they want to do as the cost of
doing it rises
terms of wants - answer economists like to emphasize that once we have
achieved
utility maximization - answer Assumption that people try to allocate their
incomes so as to maximize their satisfaction;
rises at a diminishing rate with additional consumption.
marginal utility - answer the additional utility gained from consuming an
additional unit of a good
law of diminishing marginal utility - answer the tendency for the additional
utility gained from consuming an additional unit of a good to diminish as
consumption increases beyond some point
optimal combination of goods - answer the affordable combination that
yields the highest total utility
rational spending rule - answer spending should be allocated across goods so
that the marginal utility per dollar is the same for each good;
