Econ 2.2-2.3 Study Guide

What do we assume is the driving force behind individual choice?

• Cost

• The difference between two things

• To maximize a persons utility

• Supply

What is a good?

• Something that provides utility when consumed that can be stored.

• Something that provides utility when consumed that can't be stored.

What is Utility?

• Money

• Satisfaction

• Good

• Service

What is Rational Economic behavior?

• People make decisions that provides them with the highest amount of utility

• People make decisions that provides them with the lowest amount of utility

• People make decisions that provides them with the no amount of utility

• None of the above

What is a Service?

• Something that provides utility when consumed that can't be stored.

• Something that provides utility when consumed that can be stored.

What is preference ordering?

• Randomly selecting your choices

• Choosing things that give you no utility

• Ranking your choices based off of the utility they offer you

What is Margin?

• The difference between two things

• Satisfaction

• The act of deriving utility

• Goods and Services

What is Marginal utility?

• Things that provide utility when consume but can't be store

• Amount of utility gained from consuming one/more units of good or service

• The act of deriving utility

• Amount of utility decrease from consuming one/more units of good or service

What is Diminishing Marginal Utility?

• Getting utility; things we use to get utility

• Point at which no more utility is left

• Amount of utility decrease from consuming one/more units of good or service

• Amount of utility gained from consuming one/more units of good or service

What do we assume is the driving force behind individual choice?

• Cost

• The difference between two things

• To maximize a persons utility

• Supply