| Term | Definition |
|---|
| Util | The unit of measurement for utility. |
| Utility | Usefulness gained from consuming a product. |
| Marginal Utility | The extra usefulness gained from consuming an extra unit of a product. |
| Total Utility | The total amount of usefulness gained from consuming a specific amount of a product. |
| Law of Diminishing Marginal Utility | The law stating that as a person consumes additional units of a good, eventually the utility gained from each additional unit of the good decreases |
| Consumer Surplus | The difference between the maximum price consumers are willing to pay and the price they actually pay. |
| Producer Surplus | The difference between the minimum price suppliers are willing to accept and the prices they actually receive. |
| Interpersonal Comparison of Utility | A comparison of marginal utility from one consumer to another consumer. |
| Budget Constraint | The combination of goods that can be purchased with a limited amount of income. |
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