Utility analysis ppt

Utility Analysis ,[object Object],[object Object],[object Object],[object Object]

CARDINAL AND ORDINAL UTILITY ,[object Object],[object Object],[object Object],[object Object],[object Object]

TYPES OF UTILITY. ,[object Object]

The Law of Diminishing Marginal Utility ,[object Object],[object Object]

Assumptions of the Law : ,[object Object],[object Object],[object Object],[object Object],[object Object]

Definition of the Law ,[object Object],[object Object]

Total and Marginal Utilities ,[object Object],[object Object],[object Object]

Explanation of the Law of Diminishing Marginal Utility ,[object Object]

Diagram & Table Explanation TUC MUC -2 28 7 0 30 6 2 30 5 4 28 4 6 24 3 8 18 2 - 10 1 Marginal Utility Total Utility X Units

The relationship between total utility and marginal utility ,[object Object],[object Object],[object Object]

Importance of the Law: ,[object Object],[object Object],[object Object],[object Object],[object Object]

The Law of Equi Marginal Utility : ,[object Object],[object Object],[object Object],[object Object]

Assumptions of the Law: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Illustration of the Law ,[object Object],[object Object]

[object Object],20 30 Total 0 2 5 2 4 4 4 6 (5) 3 6 (4) 8 (3) 2 8 (2) 10(1) 1 Muy Mux Units

Importance of the Law: ,[object Object],[object Object],[object Object],[object Object]

CONSUMER SURPLUS ,[object Object],[object Object],[object Object]

Consumer surplus Meaning ,[object Object],[object Object]

Table: Explaining Consumer’s Surplus 0 4 4 4 12 16 28 Total 2 4 6 3 4 4 8 2 6 4 10 1 Consumer Surplus Actual price Price willing to pay X units

Consumer Surplus (DPR) ,[object Object],O Q P D R D

Engle Consumption Curve (Engle 1821-1896) ,[object Object],[object Object],[object Object],[object Object]

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