Consumer Behaviour (AQA A-Level Economics): Flashcards

Acting to maximise utility/satisfaction from goods consumed

Satisfaction/economic welfare from consuming a good or service

Additional satisfaction from consuming one more unit of a good

Each extra unit consumed gives progressively less satisfaction

Where marginal utility is zero and total utility is maximised

Water (vital) cheap; diamonds (ornamental) expensive

Limit on choices from limited income and given prices

Consumer who cannot influence the market prices they pay

$MU = P$ (marginal utility equals price)

Inferring consumer preferences from observing actual purchases