Chapter 20 Printable One-Page Review
 Consumer Behavior and Demand Theory Review   View Chapter 20 with videos

  A. Satisfaction received and limited budgets determine consumer demand.
  B.
Utility
measures the want-satisfying power of a good or service.
  C.
Marginal utility is the additional or incremental satisfaction (utility) a
       consumer  receives from acquiring one additional unit of a product.
  D.
Law of diminishing marginal utility: Consuming more of a product within
      a given period will at some point result in diminishing marginal utility. 
  E. Utility maximizing rule: When spending a limited amount of money,
      consumers try to equate the marginal utility per dollar for the items
      being purchased.
  F
Normal Goods, consumers buy more as income rises,
     Inferior Goods, buy less. beef
  G.
Inferior Goods, consumers buy less as income rises, 
      Inferior Goods, buy fewer potatoes

H. Consumer's surplus
1. All goods are purchased at an equilibrium price. 
2. Because consumers would have paid more for smaller
quantities purchased, they are said to receive a surplus.