Lecture Economics (19/e) - Chapter 6: Consumer behavior

In this chapter, you will see how individual consumers allocate their incomes among the various goods and services available to them. Given a certain budget, how does a consumer decide which goods and services to buy? This chapter will develop a model to answer this question. This chapter will also survey some of the recent insights about consumer behavior provided by the field of behavioral economics. 06 Consumer Behavior McGrawHill/Irwin Copyright © 2012 by The McGrawHill Companies, Inc. All

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06 Consumer Behavior McGrawHill/Irwin Copyright © 2012 by The McGrawHill Companies, Inc. All rights reserved. Law of Diminishing Marginal Utility • Utility is the satisfaction one gets from consuming a good or service •Not the same as usefulness •Subjective •Difficult to quantify LO1 6-2 Law of Diminishing Marginal Utility • Util is one unit of satisfaction or pleasure • Total utility is the total amount of satisfaction • Marginal utility is the extra satisfaction from an additional unit of the good MU = ΔTU/ΔQ LO1 6-3 Law of Diminishing Marginal Utility • As consumption of a good or service increases, the marginal utility obtained from each additional unit of the good or service decreases • Explains downward sloping demand LO1 6-4 Total Utility and Marginal Utility Total Utility (1) Tacos Consumed Per Meal (2) Total Utility, Utils (3) Marginal Utility, Utils 30 TU 20 0 0] 1 10] 2 18] 3 24] 4 28] 5 30 6 30 7 28 10 8 6 4 2 0 -2 10 0 1 2 3 4 5 6 7 10 8 6 4 2 0 -2 1 2 3 4 5 6 7 MU LO1 6-5 ... - tailieumienphi.vn

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