Explain the concepts of total utility and marginal utility in economics as discussed in the image.
Understand the Problem
The question is focused on the concepts of cardinal utility analysis, total utility, and marginal utility in economics, specifically illustrating how these concepts can be measured and understood through examples and a utility table.
Answer
Total utility is the total satisfaction from consuming a quantity of a good; marginal utility is the additional satisfaction from an extra unit. Marginal utility often diminishes with increased consumption.
Total utility measures the total satisfaction from consuming a specific quantity of a good. Marginal utility is the additional satisfaction from one more unit. As more units are consumed, marginal utility typically decreases, illustrating the law of diminishing marginal utility.
Answer for screen readers
Total utility measures the total satisfaction from consuming a specific quantity of a good. Marginal utility is the additional satisfaction from one more unit. As more units are consumed, marginal utility typically decreases, illustrating the law of diminishing marginal utility.
More Information
According to the law of diminishing marginal utility, as a person consumes more units of a good, the additional satisfaction (marginal utility) tends to decrease. This principle helps explain consumer behavior and demand in economics.
Tips
A common mistake is confusing total utility with marginal utility. Total utility accumulates over units, whereas marginal utility is the increment for each additional unit.
Sources
- Total Utility Vs Marginal Utility: Economics & Examples - Vaia - vaia.com
- Lesson overview - Total utility and marginal utility - Khan Academy - khanacademy.org
- Marginal Utilities: Definition, Types, Examples, and History - investopedia.com
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