xBookUtils.terms['fn_4_501'] = "There may come a point at which more of a good thing stops being better. Economists call this a satiation point. For instance, the first jelly bean may make us happy, but the 1,437th jelly bean might actually make us sick if we ate it, making us worse off than had we eaten only 1,436. However, because people can sometimes save extra jelly beans for later, trade them with someone else for something they want, or just give them away, satiation points tend not to be very important in practice.
In addition, to keep things relatively simple, we also assume that consumers can discard unwanted goods at no cost, a concept economists call “free disposal.”";
xBookUtils.terms['fn_4_502'] = "In some special cases, this might not be right. Most people would prefer having a second water ski or a second snow ski to having one of each, for example. But it’s almost always true and makes the analysis much simpler.";
xBookUtils.terms['fn_4_503'] = "Marginal utility can be calculated for any given utility function.";
xBookUtils.terms['fn_4_504'] = "In mathematical parlance, these order-preserving shifts, squeezes, or stretches of a utility function are called monotonic transformations. Any monotonic transformation of a utility function will imply exactly the same preferences for the consumer as the original utility function. Consider our first example of a utility function from consuming Junior Mints and Kit Kats, U = J × K. Suppose that it were U = 8J × K + 12 instead. For any possible bundle of Junior Mints and Kit Kats, this new utility function will imply the same ordering of the consumer’s utility levels as would the old function. (You can put in a few specific numbers to test this.) Because the consumer’s relative preferences don’t change, she will make the same decisions on how much of each good to consume with either utility function.";
xBookUtils.terms['fn_4_505'] = "Aviv Nevo, “Measuring Market Power in the Ready-to-Eat Cereal Industry,” Econometrica 69, no. 2 (2001): 307–342.";
xBookUtils.terms['fn_4_506'] = "You could think of reasons why the different-sized bags might not be perfect substitutes—maybe there’s a convenience factor involved with the smaller ones because there’s no need to worry about storing open, partially eaten bags. But even allowing for these small differences, they’re fairly close to perfect substitutes.";
xBookUtils.terms['fn_4_507'] = "The proportion in which perfect complements are consumed need not be one-for-one, as in the case of our left- and right-shoe example. Chopsticks and Chinese buffet lunches might be perfect complements for some consumers, for example, but it’s likely that they will be consumed in a proportion of 2 chopsticks to 1 buffet. It’s hard to eat with just one chopstick.";
xBookUtils.terms['fn_4_508'] = "Steven Levitt and Chad Syverson, “Market Distortions When Agents Are Better Informed: The Value of Information in Real Estate Transactions,” Review of Economics and Statistics 90, no. 4 (2008): 599–611.";
xBookUtils.terms['fn_4_509'] = "Note that limits on how much a consumer can purchase are a lot like the quotas we learned about in Chapter 3, except now they apply to a single consumer, rather than to the market as a whole.";
xBookUtils.terms['fn_4_510'] = "Interestingly, the same consumer utility-maximization problem can be solved as a cost-minimization problem instead and it will give exactly the same answer. In this case, a consumer tries to minimize the cost of reaching a target level of utility. Economists call this the “dual” to the utility-maximization problem. The appendix to this chapter gives the mathematics behind both approaches and shows why they give the same answer.";
xBookUtils.terms['fn_4_511'] = "Technically, this is true only of consumers who are consuming a positive amount of both goods, or who are at “interior” solutions in economists’ lingo. We’ll discuss this issue in the next section.";
xBookUtils.terms['fn_4_512'] = "John R. Crooker and Aju J. Fenn, “Estimating Local Welfare Generated by an NFL Team under Credible Threat of Relocation,” Southern Economic Journal 76, no. 1 (2009): 198–223.";
xBookUtils.terms['fn_4_513'] = "An interesting feature of this study is that it measures consumers’ utility functions using data on hypothetical rather than actual purchases. That is, no Minnesotan had had to actually give up consuming something else to keep the Vikings around. They were only answering a question about how much they would pay if it came time to actually make that choice. While economists prefer to measure consumers’ preferences from their actual choices (believing actual choices to be a more reliable reflection of consumers’ preferences), prospective choices are sometimes the only way to measure preferences for certain goods. An example of this is when economists try to measure the value of abstract environmental goods, such as species diversity.";