EKN 110 CHAPTER 3 CORRECT
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total utility - ANSWERThe total amount of satisfaction derived from the consumption
of a single product or a combination of products
Budget line - ANSWERA line that shows the different combinations of two goods that
can be purchased with a certain income given the price of the goods
Indifference curve - ANSWERA curve that shows the different combinations of two
goods that yield the same total utility for the consumer
Indifference map - ANSWERA set of indifference curves that each representing a
different level of utility which together show the preference of the consumer
Equilibrium position in the indifference curve model - ANSWERThe combination of
two goods that yields maximum utility for the consumer given a certain amount to
spend
Total utility - ANSWERThe total amount of satisfaction derived from consuming a
product or a collection of products
Law of diminshing marginal utility - ANSWERThe principle that as consumption of a
good or service increases the marginal utility that the consumer derives from
consuming an additional unit decreases
Utility maximising rule - ANSWERThe principle that in order to obtain maximum utility
a consumer must allocate money income so that the last rand spent on a good or
service produces the same marginal utility
100%
total utility - ANSWERThe total amount of satisfaction derived from the consumption
of a single product or a combination of products
Budget line - ANSWERA line that shows the different combinations of two goods that
can be purchased with a certain income given the price of the goods
Indifference curve - ANSWERA curve that shows the different combinations of two
goods that yield the same total utility for the consumer
Indifference map - ANSWERA set of indifference curves that each representing a
different level of utility which together show the preference of the consumer
Equilibrium position in the indifference curve model - ANSWERThe combination of
two goods that yields maximum utility for the consumer given a certain amount to
spend
Total utility - ANSWERThe total amount of satisfaction derived from consuming a
product or a collection of products
Law of diminshing marginal utility - ANSWERThe principle that as consumption of a
good or service increases the marginal utility that the consumer derives from
consuming an additional unit decreases
Utility maximising rule - ANSWERThe principle that in order to obtain maximum utility
a consumer must allocate money income so that the last rand spent on a good or
service produces the same marginal utility
