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Consumer/Utility (Assumptions about Consumer (Limited income, Acts…
Consumer/Utility
Laws
Law of Diminishing Marginal Utility
Law of Equi-Marginal Returns
Terms
Marginal Utility
Consumer
Utility
Economic Goods
Assumptions about Consumer
Limited income
Acts rationally
Aims to maximise utility
Subject to Law of Diminishing Marginal Utility
Only buys Economic Goods
Assumptions of LDMU
Certain minimum(Origin)
Passage of time
Incomes don't change
Tastes do not change
Doesn't apply to addictive goods
Exceptions to LDMU
Addictive goods
Passage of time
Medicine
Economic Goods
Utility
Scarce
Transferable