Term
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Definition
| The additional utility gained from consuming an additional unit of good |
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Term
| Law of Diminishing Marginal Utility |
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Definition
| The tendency for the additional utility gained from consuming an additional unit of a good to diminish as consumption increases beyond some point |
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Term
| Optimal Combination of Goods |
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Definition
| The affordable combination that yields the highest total utility |
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Term
| The Rational Spending Rule |
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Definition
| Spending should be allocated across goods so that the marginal utility per dollar is the same for each good |
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