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Lecture 1
Utility and optimize consumer choice in the traditional theory of demand is
known that the user has reasonable and traditional behavior
...
User complying with commodity price
plans such allocation of income to achieve the greatest possible satisfaction or
utility
...
To
achieve its objective the user must compare the usefulness of different consumer
baskets that can be purchased with available income
...
Origin and formation of the theory of usefulness
...
2
...
• Buyers - express the subjective feeling conscious state of human
frustration caused by the lack of defined benefit and strive to overcome it;
• The value is intrinsic ability of wealth to satisfy certain needs
...
• Total utility - represents the collective effect of consumption, the total
amount of utilities of all consumer goods or units of a good;
• Total utility (TU) is depending on the quantity (Q) of a particular good TU = f (Q)
• The average utility (AU) is the usefulness of a single unit of goods, which is
determined intending on the total amount of consumed good AU = TU / Q
• Marginal utility - is the additional utility that is derived from the
consumption of an additional unit of a good and utility of the last unit of the
good
...
Blago (ΔQ),
ceteris paribus MU = ΔTU / ΔQ
3
...
This law is the principle that
an increase in the quantity consumed of one good utility of each additional
unit of the good decreases (and therefore increase the total utility slows)
...
4
...
Consumption of every good thing
continues until weighted marginal utilities of all good catch, that achieves
equilibrium in consumer behavior
...
Consumer behavior of households
1
...
• substitution effect - increase in the quantity demanded of cheaper
goods, which replaces the demand for relatively expensive goods;
• Effect of income - when the price of a commodity rises, with a given
amount of income can buy a small amount of goods;
• The combination of these two effects largely determines the demand
for goods by households
...
There are two ways to compare the usefulness of conduct
...
• The Cardinal - the utility can be quantified - measured with yutili or
currency;
• ordinal - the utility is not quantifiable, but has a degree of comparison
or ranking of Cons
...
In the theory of cardinal utility displays the
demand curve, which is based on the axiom of reducing marginal
utility
...
In the consumption of goods is 2 establishes a set of
quantitative combinations of goods, which yield the same total
utility
...
Due to the
equal overall utility of the consumer is indifferent to which particular
combination would choose
...
Features:
1) The curves located farther away from the origin of the coordinate axis
representing a high level of utility;
2) The curves do not intersect and do not touch because otherwise we
get two different levels of utility will be presented with the same
intersection;
3) Have a negative slope is determined by the marginal rate of
substitution of wealth