Instructions: Identify the Following Terms

question 118

Short Answer

Instructions: Identify the following terms.
philosophes

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Definitions:

Equal Marginal Principle

Principle that utility is maximized when the consumer has equalized the marginal utility per dollar of expenditure across all goods.

Hicksian Substitution Effect

Alternative to the Slutsky equation for decomposing price changes without recourse to indifference curves.

Indifference Curves

A graph showing different bundles of goods between which a consumer is indifferent.

Lagrangian

Function to be maximized or minimized, plus a variable (the Lagrange multiplier) multiplied by the constraint.