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BENEFIT-COST RATIO: The benefit of an activity per dollar of cost. Benefit-cost ratios (or alternatively cost-benefit ratios) are frequently estimated for many forms of government spending, as well as a growing number of business investments. This technique was originally developed to determine if public investment projects, like dams, public parks, highways, etc., were worth doing. The logic is simple -- If benefits are greater than costs, then the project is worthwhile, if they are less, then it isn't.
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Lesson 9: Consumer Demand | Unit 3: Marginal Utility
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Page: 15 of 22
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In this unit, you should have learned about:- Marginal utility as the extra satisfaction obtained from consuming more units of a good.
- How marginal utility is identified as the change in total utility due to a change in the quantity.
- The marginal utility schedule as a table relating marginal utility and the quantity consumed.
- How marginal utility decreases with the quantity consumed until it becomes negative.
- The law of diminishing marginal utility which states that marginal utility declines when more of a good is consumed.
- Why the law of diminishing marginal utility results from fulfilling a want or need.
- The potential relation between the law of demand and the law diminishing marginal utility.
- How the diamond-water paradox illustrates the difference between total utility and marginal utility.
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AGGREGATE DEMAND INCREASE, LONG-RUN AGGREGATE MARKET A shock to the long-run aggregate market caused by an increase in aggregate demand resulting in and illustrated by a rightward shift of the aggregate demand curve. An increase in aggregate demand in the long-run aggregate market results in an increase in the price level but no change in real production. The level of real production resulting from the aggregate demand shock is full-employment real production.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time at a flea market seeking to buy either a wall poster commemorating Thor Heyerdahl's Pacific crossing aboard the Kon-Tiki or decorative garden figurines. Be on the lookout for neighborhood pets, especially belligerent parrots.
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In the Middle Ages, pepper was used for bartering, and it was often more valuable and stable in value than gold.
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"You miss 100% of the shots you never take. " -- Wayne Gretzky, hockey player
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CBI
Confederation of British Industry
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