What Does It Mean to Maximize Utility Quizlet

This means that the rst unit of fruit you consume has higher marginal utility marginal utility is just the rst derivative of the utility function than the second. Concave means that more is better but at a decreasing rate.

Econ Test 2 Chapter 7 Flashcards Quizlet

Classical utilitarianism differs from other moral theories primarily in what it omits rather than in what it includes.

. Total utility is maximum when marginal utility is zero. It is based in the law of diminishing marginal utility which says as more and more units of a good are consumed MU ie level of satisfaction derived from each successive unit goes on falling because desire for that commodity tend to fall. Means that more is better more consumption yields more utility.

Definition of Rational expectations an economic theory that states when making decisions individual agents will base their decisions on the best information available and learn from past trendsRational expectations are the best guess for the futureRational expectations have implications for economic policy. Pleasure or Happiness Is the Only Thing That Truly Has Intrinsic Value. The common view among utilitarians seems to be that the subjectively right act maximizes expectable utility in other words Uo x Po the utility of the outcome x the probability of that out.

Utilitarianism gets its name from the term utility which in this context does not mean useful but rather means pleasure or happiness. To say that something has intrinsic value means that it.

Chapter 3 And 4 Consumer Preferences And The Concept Of Utility Flashcards Quizlet