{"id":310,"date":"2020-03-24T04:51:34","date_gmt":"2020-03-24T04:51:34","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/chapter\/glossary-utility\/"},"modified":"2023-05-22T19:20:58","modified_gmt":"2023-05-22T19:20:58","slug":"glossary-utility","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/chapter\/glossary-utility\/","title":{"raw":"Glossary: Utility","rendered":"Glossary: Utility"},"content":{"raw":"backward-bending supply curve for labor <\/strong>the situation when high-wage people can earn so much that they respond to a still-higher wage by working fewer hours\n\nbehavioral economics <\/strong>a branch of economics that seeks to enrich the understanding of decision-making by integrating the insights of psychology and by investigating how given dollar amounts can mean different things to individuals depending on the situation.\n\nbudget constraint line <\/strong>shows the possible combinations of two goods that are affordable given a consumer\u2019s limited income\n\nconsumer equilibrium<\/strong> when the ratio of the prices of goods is equal to the ratio of the marginal utilities (point at which the consumer can get the most satisfaction)\n\ndiminishing marginal utility<\/strong> the common pattern that each marginal unit of a good consumed provides less of an addition to utility than the previous unit\n\nfungible<\/strong> the idea that units of a good, such as dollars, ounces of gold, or barrels of oil are capable of mutual substitution with each other and carry equal value to the individual.\n\nincome effect<\/strong> a higher price means that, in effect, the buying power of income has been reduced, even though actual income has not changed; always happens simultaneously with a substitution effect\n\nmarginal utility per dollar<\/strong> the additional satisfaction gained from purchasing a good given the price of the product; MU\/Price\n\nmarginal utility<\/strong> the additional utility provided by one additional unit of consumption\n\nsubstitution effect<\/strong> when a price changes, consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price; always happens simultaneously with an income effect\n\ntotal utility<\/strong> satisfaction derived from consumer choices","rendered":"

backward-bending supply curve for labor <\/strong>the situation when high-wage people can earn so much that they respond to a still-higher wage by working fewer hours<\/p>\n

behavioral economics <\/strong>a branch of economics that seeks to enrich the understanding of decision-making by integrating the insights of psychology and by investigating how given dollar amounts can mean different things to individuals depending on the situation.<\/p>\n

budget constraint line <\/strong>shows the possible combinations of two goods that are affordable given a consumer\u2019s limited income<\/p>\n

consumer equilibrium<\/strong> when the ratio of the prices of goods is equal to the ratio of the marginal utilities (point at which the consumer can get the most satisfaction)<\/p>\n

diminishing marginal utility<\/strong> the common pattern that each marginal unit of a good consumed provides less of an addition to utility than the previous unit<\/p>\n

fungible<\/strong> the idea that units of a good, such as dollars, ounces of gold, or barrels of oil are capable of mutual substitution with each other and carry equal value to the individual.<\/p>\n

income effect<\/strong> a higher price means that, in effect, the buying power of income has been reduced, even though actual income has not changed; always happens simultaneously with a substitution effect<\/p>\n

marginal utility per dollar<\/strong> the additional satisfaction gained from purchasing a good given the price of the product; MU\/Price<\/p>\n

marginal utility<\/strong> the additional utility provided by one additional unit of consumption<\/p>\n

substitution effect<\/strong> when a price changes, consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price; always happens simultaneously with an income effect<\/p>\n

total utility<\/strong> satisfaction derived from consumer choices<\/p>\n","protected":false},"author":32,"menu_order":20,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-310","chapter","type-chapter","status-publish","hentry"],"part":271,"_links":{"self":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/310","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/users\/32"}],"version-history":[{"count":1,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/310\/revisions"}],"predecessor-version":[{"id":311,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/310\/revisions\/311"}],"part":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/parts\/271"}],"metadata":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/310\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/media?parent=310"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapter-type?post=310"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/contributor?post=310"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/license?post=310"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}