Question

Chapter 7 Vocabulary Name: Match the term with the correct definition Income effect a trying to get the biggest bang for the buck. Utility maximizing rule b as the price of a good drops, consumers have more money to spend on it and other goods Consumer equilibrium The amount of satisfaction gained from consumption of goods and services. d shows the combinations of two items that can be purchased with a limited amount of money. Law of diminishing marginal utility Total utility a curve that represents a set of choices that have the same level of utility. Marginal utility when the ratio of the prices of the two goods equals the ratio of their marginal utilities. Indifference curve an increase in the demand for a good as a result of an increase in the price of another good. In the change in consumer satisfaction from consumption of another of a good or service Rational behavior Budget constraint the last dollar spent on each product has the same amount of added utility. Substitution effect the satisfaction received from the consumption of a good will decline with each additional unit consumed

Answer 1

Answer

Income effect	b
Utility maximization rule	i
Consumer equilibrium	f
Low of diminishing marginal utility	j
Total utility	c
Marginal utility	h
Indeference curve	e
Rational behaviour	a
Budget constraints	d
Substitution effect	g