1. Consumer Choice Demand- Willingness and Ability
Consumer Surplus- Price above what you had to spend
Utility- Satisfaction gained from purchase

2. Utility- want satisfying power of a good or service “Getting the most for your money” $$$$$$$$$

3. Consumer & Producer Surplus

4. Important Vocabulary Utility Analysis Util Total Utility
Marginal Utility= Change in total utility / change in number of units consumed
Consumer Optimum
Law of Diminishing Marginal Utility

5. Calculating Utils

6. Graphing Total and Marginal Utility

7. Measuring Total and Marginal Utility

8. Calculating Consumer Optimum
And spend all your money!

9. The Diamond- Water Paradox
Why does water cost more than diamonds when water is a need and diamonds are frivolous?

10. Decisions Regarding Utility
Firms
Households
Government