economics terms

Marginal Utility

The marginal utility of X is the additional utility from one additional unit of X or, more formally, the derivative of utility with respect to X.  The marginal utility of X may very well depend on the amounts of other goods, Y and Z, for example, that also enter a utility function.

Marginal utility is an important concept because the theory of the consumer generally assumes that agents consider marginal utilities when deciding how much of X (and Y and Z) to consume.  Marginal utility plays an important role in the Theory of the Consumer, which includes the EconModel applications Two Goods - Two Prices, Labor Supply, Income Taxes, and Transfer Payments , and Intertemporal Substitution.

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Economics Terms

Arbitrage Pricing
Arbitrage Profit
Average Cost
Balance of Payments
Budget Constraint
Call Option
Concave Function
Consumer Surplus
Consumption Function
Convex Function
Deadweight Loss
Demand Curve
Economic Agent
Economic Model
Economics Textbook
Endogenous Technical Change
Exchange Rate
Expectations Hypothesis
Federal Funds (Fed Funds) Rate
Fixed Exchange Rate
Floating Exchange Rate
Frictional Unemployment
Gross Domestic Product (GDP)
Income Effect
Income Elasticity
Indifference Curve
Interest Rate
Intertemporal Substitution
Jensen's Inequality
Marginal Cost
Marginal Product
Marginal Utility
Optimizing Behavior
Perfect Competition
Phillips Curve
Price Elasticity
Producer Surplus
Production Function
Production Possibility Frontier
Put Option
Reservation Wage Rate
Risk Aversion
Structural Unemployment
Substitution Effect
Supply Curve
Taylor Rule
Technological Growth
Term Structure
Theory of the Consumer
Theory of the Firm
Unemployment Rate
Utility Function
Velocity of Money
Yield Curve