Theory of Consumer Behavior — Chapter Summary

Utility is the want

Utility is the want-satisfying capacity of a commodity. It is subjective, so the same good can give different satisfaction to different people or at d

This approach assumes that utility can

This approach assumes that utility can be measured in numbers. It uses total utility and marginal utility to study satisfaction.

Marginal utility is the change

Marginal utility is the change in total utility due to consumption of one additional unit. It is given by MU_n = TU_n - TU_{n-1}. When total utility s

Marginal utility from consuming each additional

Marginal utility from consuming each additional unit declines as consumption increases, while consumption of other commodities remains constant.

This approach does not measure utility

This approach does not measure utility in numbers. It only ranks bundles as giving more, less, or equal satisfaction.