1 / 6

Utility Maximization

Explore how consumers maximize utility through choices of goods and services, concepts like diminishing marginal utility, and optimization through marginal analysis. Understand utility as the satisfaction from consumption and learn to find optimal consumption bundles while considering budget constraints.

kevingonzalez
Download Presentation

Utility Maximization

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Module Micro: Econ: 15 51 Utility Maximization • KRUGMAN'S • MICROECONOMICS for AP* Margaret Ray and David Anderson

  2. What you will learnin thisModule: • How consumers make choices about the purchase of goods and services • Why a consumer’s goal is to maximizing utility • Why the principle of diminishing marginal utility applies to the consumption of most goods and services • How to use marginal analysis to find the optimal consumption bundle

  3. Maximizing utility In the Theory of Consumer Choice, consumers’ goal is to maximize their utility.

  4. Utility • Utility: a measure of the satisfaction the consumer derives from consumption of goods and services. • Utility and Consumption • The principle of diminishing marginal utility

  5. Budgets Good Y B C A • The budget line • The optimal consumption bundle Good X

  6. Spending the Marginal Dollar • Marginal utility • MU per dollar • Optimal consumption

More Related