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ITE LECTURE3&4 - Coggle Diagram

- - - - marginal utility= :small_red_triangle:in total utility/:small_red_triangle:q
        
        the law of diminishing marginal utility: tendency for additional utility gained from consuming an additional unit of a good to decrease as consumption increases beyond some point
        
        marginal utility can increase at low levels of consumption，eventually marginal utility declines
        
        maximize utility: when the marginal utility per dollar(price unit)is the same for all goods
        
        rational spending rule: MUa / Pa = MUb / Pb
        
        nominal and real price
        
        nominal price:the absolute price of a good in terms of dollars
        
        real price: the price that be adjusted for inflation
- - - - F():production technology
      - K: capital(land\ building\ machinery and other equipment\inventories )
      - L: labor
    - - short run: at least one production input cannot be changed
      - long run: the period of time long enough to make all inputs variable
- - - - MRTS(marginal rate of technical substitution)=— :small_red_triangle:K/ :small_red_triangle:L=MPL/MPK
      - MPL/w=MPK/r