Principles of Microeconomics / Unit 17 MIC 1614 short lesson, about 20 seconds
One Rule, Two Languages
Captions available
The idea
The consumer's rule is marginal utility per dollar equal across goods, the last dollar buying equal satisfaction anywhere. On the indifference diagram it is the tangency: the marginal rate of substitution equals the price ratio.
In practice
Twenty utils per dollar on food, ten on drink: buy more food.
Where people slip
Move spending toward the higher ratio; utility is never compared across people.
Your place on the trail
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