 | Economics 14/e McConnell | |||||
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budget line
A line which shows the different combinations of two products a consumer can purchase with a specific money income given the products' prices..
indifference curve
A curve showing the different combinations of two products which give a consumer the same satisfaction or utility..
marginal rate of substitution
The rate at which a consumer is prepared to substitute one good for another (from a given combination of goods) and remain equally satisfied (have the same total utility); equal to the slope of a consumer's indifference curve at each point on the curve.
indifference map
A curve showing the different combinations of two products which give a consumer the same satisfaction or utility.
equilibrium position
The utility-maximizing combination will be the one lying on the highest attainable indifference curve.
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