AP Micro UTILITY STUFF by Savannah Julius https://padlet.com/8juliuss/apmicroutility Marginal Utility en-us 2017-10-12 00:29:46 UTC 2023-05-21 09:37:48 UTC hello@padlet.com https://i.ytimg.com/vi/vC1qjHL4NRQ/hqdefault.jpg Quizlet 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196250270 https://quizlet.com/_3usn80]]> 2017-10-12 00:32:28 UTC https://padlet.com/8juliuss/apmicroutility/wish/196250270 Equalization Principle 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196250331 MUx / Px = MUy / Py


ratios must be equal]]> 2017-10-12 00:33:06 UTC https://padlet.com/8juliuss/apmicroutility/wish/196250331 what it means 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196250587
  • the marginal utility of good x divided by the price of good x
    • must equal...
    • the marginal utility of good y divided by the price of good y
    ]]>     2017-10-12 00:35:14 UTC https://padlet.com/8juliuss/apmicroutility/wish/196250587     total utility 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196250711 total satisfaction received from consuming a given quantity of goods]]> 2017-10-12 00:36:33 UTC https://padlet.com/8juliuss/apmicroutility/wish/196250711 solve for total utility if given marginal utility 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196250789 begin with first marginal utility number as the first total utility value

    add marginal utility to previous total utility for current total utility value

    remember: total utility increases as the number of good increases]]>     2017-10-12 00:37:12 UTC https://padlet.com/8juliuss/apmicroutility/wish/196250789     as the number of goods increases, TOTAL UTILITY increases 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196251330 direct relation]]> 2017-10-12 00:41:29 UTC https://padlet.com/8juliuss/apmicroutility/wish/196251330 answers 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196251410
  • begin with 10 for total utility of pizza
  • add 8 to get 18
  • add 6 to get 24...
  • begin with 8 for total utility of songs
  • add 6 to get 14
  • add 4 to get 18...

    • ]]>     2017-10-12 00:42:25 UTC https://padlet.com/8juliuss/apmicroutility/wish/196251410     marginal utility 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196251506 measures the change in total utility a person derives from consuming an additional unit of a good;

    satisfaction gained from consuming another quantity of a good

    just... one... more... cookie!]]>     2017-10-12 00:43:33 UTC https://padlet.com/8juliuss/apmicroutility/wish/196251506     as the number of goods increases, MARGINAL UTILITY decreases 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196251619 inverse relation]]> 2017-10-12 00:44:26 UTC https://padlet.com/8juliuss/apmicroutility/wish/196251619 solve for marginal utility if given total utility 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196251656 find the difference between the two total utilities values

    remember:
     - should be positive numbers
    - marginal utility decreases as the number of goods increases]]>     2017-10-12 00:44:48 UTC https://padlet.com/8juliuss/apmicroutility/wish/196251656     answers 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196251947
  • 10 - 0 = 10 for marginal utility from 0 pizzas to 1 pizza
  • 18 - 10 = 8
  • 24 - 18 = 6... 
  • 8 - 0 = 8 for marginal utility from 0 songs to 1 song
  • 14 - 8 = 6
  • 18 - 14 = 4...
    • ]]>     2017-10-12 00:47:31 UTC https://padlet.com/8juliuss/apmicroutility/wish/196251947     Maximizing Utility with the Equalization Principle 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196252217 MUx / Px = MUy / Py

    always make a separate column for these ratios]]>     2017-10-12 00:49:45 UTC https://padlet.com/8juliuss/apmicroutility/wish/196252217     how to calculate ratios 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196252282 take the marginal utility value and divide it by the price of the respected good]]> 2017-10-12 00:50:18 UTC https://padlet.com/8juliuss/apmicroutility/wish/196252282 answers 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196252682
  • take first marginal utility value for pizza of 10 and divide it by the price of pizza of $2
    1. 10 / 2 = 5
  • 8 / 2 = 4
  • 6 / 2 = 3...
  • take first marginal utility value for the songs (8) and divide it by the price of a song ($1)
    1. 8 / 1 = 8
  • 6 / 1 = 6
  • 4 / 1 = 4...
    • ]]>     2017-10-12 00:53:38 UTC https://padlet.com/8juliuss/apmicroutility/wish/196252682     the MU/P values for each good x and y are the ratios 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196252976 look in the MU/P column created for both goods and see if a ratio in the x column is equal to a ratio in the y column

    at what quantity is each of those ratios at for each good
     - is good x at a ratio of 5 with a quantity of 2
     - is good y at a ratio of 5 with a quantity of 3

    ... if the ratios are equal, take corresponding quantities and multiple them by the price of their respected good
    --> the sum of the two products should be as close to the given budget as possible, but not exceed it]]>     2017-10-12 00:56:14 UTC https://padlet.com/8juliuss/apmicroutility/wish/196252976     Solving for at what quantities will utility be maximized 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196253218 pizza and songs both have ratios that equal 4 when...
     - there are 2 pizzas purchased
     - 3 songs purchased


    does it maximize and fit in budget?
    2($2) = $4
    3($1) = $3
    $4 + $3 does not equal $12]]>     2017-10-12 00:58:45 UTC https://padlet.com/8juliuss/apmicroutility/wish/196253218     answers 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196253917 pizza and songs both have ratios that equal 2 when there are... 
     - 4 pizzas purchased
     - 4 songs purchased


    does it maximize and fit in budget?
    4($2) = $8
    4($1) = $4
    $8 + $4 = $12 --> GOOD TO GO]]>     2017-10-12 01:05:50 UTC https://padlet.com/8juliuss/apmicroutility/wish/196253917     maximize utility when the marginal utility to price ratio equal for all goods subject to the income restraint 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196254343 2017-10-12 01:09:19 UTC https://padlet.com/8juliuss/apmicroutility/wish/196254343 substitution effect 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196254814 when the price of a good changes, consumers will substitute toward the more relatively less-expensive good]]> 2017-10-12 01:12:33 UTC https://padlet.com/8juliuss/apmicroutility/wish/196254814 substitution effect changing purchases on an item with an increased price 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196254900 if price of good increases...
    ... I am not going to buy that good.

    I am going to swap it with a cheaper, similar good]]>     2017-10-12 01:13:16 UTC https://padlet.com/8juliuss/apmicroutility/wish/196254900     income effect 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196255060 when the price of a good falls, consumers experience an increase in purchasing power

    when the price of a good increases, consumers experience a decrease in purchasing power]]>     2017-10-12 01:14:27 UTC https://padlet.com/8juliuss/apmicroutility/wish/196255060     income effect changing purchases on an item with an increased price 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196255189 if the price of a good increases...
    ... I am not going to buy that good.

    I no longer have the purchasing power to buy the now more expensive good (since my income hasn't changed).]]>     2017-10-12 01:15:20 UTC https://padlet.com/8juliuss/apmicroutility/wish/196255189     increase total utility by purchasing more of the good with the larger ratio 8juliuss https://padlet.com/8juliuss/apmicroutility/wish/196255370 pizza = $2, MU of 10
    soda = $1, MU of 6

    MU/P of pizza = ratio of 5
    MU/P of soda = ratio of 6

    --> you can increase total utility by buying more soda and less pizza]]>     2017-10-12 01:16:33 UTC https://padlet.com/8juliuss/apmicroutility/wish/196255370