Utility Maximisation | Economics - Tutor2u

When multiple products are being chosen, the condition for maximising utility is that a consumer equalises the marginal utility per pound ... Economics ExploreEconomics ExploreEconomics Closepanel Overview FreeResources ReferenceLibrary Blog Collections Topics Seewhat'snew Shop AllResources StudentResources AssessmentResources Teachingresources Livestreams Overview FreeResources ReferenceLibrary Studynotes,videos,interactiveactivitiesandmore! Blog Economicsnews,insightsandenrichment Collections Curratedcollectionsoffreeresources Topics Browseresourcesbytopic Seewhat'snew› Shop AllEconomicsResources StudentResources AssessmentResources Teachingresources ResourceSelections Curratedlistsofresources Livestreams Economics ReferenceLibrary TopicVideosUtility Maximisation Level: AS,A-Level,IB Board: AQA,Edexcel,OCR,IB,Eduqas,WJEC Lastupdated4Jul2018 Share: ShareonFacebook ShareonTwitter SharebyEmail Withasingleproduct,totalutilityismaximisedwhenthemarginalutilityfromthenextunitconsumediszero(assumingthatthebudgetoftheconsumerallowsthispointtobereached.)Whenmultipleproductsarebeingchosen,theconditionformaximisingutilityisthataconsumerequalisesthemarginalutilityperpoundspent.Theconditionformaximisingutilityis:MUA/PA=MUB/PBwhere:MUismarginalutilityandPisprice.RevisionVideo:UtilityMaximisation UtilityMaximisation Utilitymaximisation Afallinthepriceofaproduct(otherfactorsremainingthesame)bringsaboutanincreaseinthemarginalutilityper£1spentIntheorythiswillcauseconsumerstoincreasetheirdemandastheyswitchoutofsubstituteproductsAllofthisassumesofcoursethatutilityismeasurableandthatconsumersaremakingrational,maximisingchoices RevisionVideo:ConceptofDiminishingMarginalUtility Totalutilityanddiminishingmarginalutility-revisionvideo 7 RevisionFlashcardsforALevelEconomics Students ResourceCollection Share: ShareonFacebook ShareonTwitter SharebyEmail Economics Reference TopicVideos Marginalutility Diminishingmarginalutility HomoEconomicus Youmightalsolike RationalBehaviour(QuizletRevision Activity) Quizzes&Activities BehaviouralEconomics-KeyCognitive Biases TopicVideos GamblingandBehaviouralEconomics[HeadStartinA-Level Economics] TopicVideos RationalityandIrrationality[HeadStartinA-Level Economics] TopicVideos EconomicsoftheCrisis-BehaviouralEconomics[HeadStartinA-Level Economics] TopicVideos CoronavirusandBehavioural Economics TopicVideos WhatHappensWhenEconomicsDoesn’tReflecttheReal World? 15thJanuary2020 Theveganeconomyhas arrived 30thNovember2019 Facebook Twitter YouTube Instagram LinkedIn Oursubjects OurSubjects ›Business ›Criminology ›Economics ›Geography ›Health&SocialCare ›History ›Law ›Politics ›Psychology ›Sociology Explore Explore ›Teaching&learningresources ›Onlinestudentcourses ›OnlineCPDforteachers ›Livestreams ›Teachingjobs Contact Contact BostonHouse, 214HighStreet, BostonSpa, WestYorkshire, LS236AD Tel:+4408448000085 ›Contactus ›Termsofuse ›Privacy&cookies ©2002-2022Tutor2uLimited.CompanyRegno:04489574.VATregno816865400. Backtotop