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Julia as a Representative Example of a Borrower Exhibiting Impatience
Diminishing Marginal Utility
Julia's Indifference Curve and Diminishing Marginal Returns to Consumption
A diagram representing Julia's preferences features a downward-sloping, convex curve labeled as 'Julia's indifference curve.' This curve is plotted on a graph with 'consumption now' on the horizontal axis and 'consumption later' on the vertical axis, both measured in dollars and ranging from 0 to 110. The coordinates are presented in the format of (consumption now, consumption later). The convex shape of this curve illustrates the principle of diminishing marginal returns to consumption, signifying that as Julia consumes more in one period, the value she places on an additional unit of consumption in that same period decreases relative to the other period.
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CORE Econ
Economics
Social Science
Empirical Science
Science
Economy
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.9 Lenders and borrowers and differences in wealth - The Economy 2.0 Microeconomics @ CORE Econ
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Motivation for Borrowing: Funding Immediate Consumption Needs
Julia's Indifference Curve and Diminishing Marginal Returns to Consumption
Julia's Optimal and Suboptimal Choices on the Feasible Frontier
Julia's Impatience at Her Endowment Point
Marco's Motivation to Save: Consumption Smoothing
Figure 9.3: Borrowing, the Interest Rate, and the Feasible Set
Julia's Initial Endowment (Point A)
Comparison of Julia's Three Financial Scenarios
Diminishing Marginal Rate of Substitution
Abundance, Marginal Utility, and MRS Along a Horizontal Line
Diminishing Marginal Utility as the Rationale for Consumption Smoothing
Julia's Indifference Curve and Diminishing Marginal Returns to Consumption
Consumer Satisfaction at a Buffet
An individual's total satisfaction (measured in 'utils') from consuming successive cups of coffee on a particular morning is shown in the table below.
Cups of Coffee Total Utility 1 10 2 25 3 35 4 40 5 42 At which point does the principle of diminishing marginal utility first become evident?
Evaluating Progressive Taxation Policy
According to the principle of diminishing marginal utility, if a consumer continues to consume additional units of a good, their total satisfaction derived from that good will eventually start to decrease.
Weekend Activity Planning
A person is consuming slices of pizza one after another. Based on the principle of diminishing marginal utility, match each consumption stage with the corresponding description of the satisfaction (utility) gained.
Employee Reward Program Design
Water Rationing Policy Analysis
Video Game Monetization Strategy
A marketing team is analyzing consumer behavior for a new brand of gourmet cookies. Which of the following customer behaviors most clearly demonstrates the principle of diminishing marginal utility?
Learn After
Diminishing MRS: A Comparison of Julia's Preferences at Points C and E
Activity: Drawing a Set of Julia's Indifference Curves with Specific Features
An individual's preferences for spending money now versus spending it a year from now are represented by a downward-sloping, convex indifference curve. 'Consumption Now' is on the horizontal axis and 'Consumption Later' is on the vertical axis. Consider two points on this single curve: Point A, where the individual has low current consumption and high future consumption, and Point B, where they have high current consumption and low future consumption. What does the convex shape of the curve imply about their willingness to trade future consumption for one additional dollar of current consumption at these two points?
Evaluating a Financial Decision
Explaining the Shape of an Indifference Curve
An individual's preferences for spending money now versus spending it later are represented by a single, downward-sloping, convex indifference curve. 'Consumption Now' is on the horizontal axis and 'Consumption Later' is on the vertical axis. Match each description of a position on the graph with its correct economic implication.
The convex shape of an indifference curve representing preferences between 'consumption now' and 'consumption later' indicates that an individual is more willing to give up a unit of future consumption for an extra unit of current consumption when their current consumption is already high, compared to when it is low.
An individual's preferences for consumption today versus consumption in the future are represented by a single, downward-sloping, convex indifference curve. At point A on this curve, the individual consumes 90 in the future. At point B on the same curve, they consume 20 in the future. To gain one additional dollar of consumption today, the individual would be willing to give up a ________ amount of future consumption when at point A compared to when at point B.
An individual's preferences for consumption now versus consumption later are represented by a single, downward-sloping, convex indifference curve. 'Consumption now' is on the horizontal axis, and 'consumption later' is on the vertical axis. Arrange the following points, which all lie on this single indifference curve, in order from where the curve is STEEPEST to where it is FLATTEST.
Evaluating Consumer Preferences
An individual's preferences for consumption now versus consumption later are typically represented by a downward-sloping, convex curve. If, hypothetically, their preferences were instead represented by a straight, downward-sloping line, what would this imply about their willingness to trade future consumption for an additional dollar of current consumption?
Connecting a Principle to a Graphical Shape