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Identifying Best Practices for and Utilities of the Form

Identifying Best Practices for and Utilities of the Form

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[Music] so in this video we are going to introduce the concept of utility and in addition to so total utility and in the related concept of marginal utility and take a look at what these look like graphically or kind of what we think might be a normal shape for you total utility and marginal utility to follow and that's going to set us up later to talk about how we think consumers maximize their utility so first off what do we mean when we use this term utility well we use this as our notion of our term for well-being welfare happiness call it what you will but this is how we we measure the consumers the households well-being and we think that this is what consumers and households try to maximize and so very very important assumption is that consumers try to maximize their utility now this is of course subject to some constraints importantly consumers are limited by their budget right their income first off right you might want to be able to go out and spend ten thousand dollar

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