This is a Microeconomics question about total and Marginal Utility. Thanks...
2006-10-07 03:30:26 · 4 answers · asked by Kourtnie04 2 in Education & Reference ➔ Higher Education (University +)
"Utility" is a catch-all word for the thing you want -- in finance it might be a function of wealth, in ethics it might be "the good" -- in other areas of economics it might be happiness.
We can think of measuring utility by using a function of inputs. For example, in finance, they try to measure utility as a function of wealth. In microeconomics, it might be as a function of the number of units you can purchase.
Total utility would just be that value. Marginal utility is a measure of the change in utility for a small change in the input. For example, one extra dollar of wealth might give me 0.25 More units of utility. Mathematically, marginal utility is just the first derivative of the utility function with respect to the input.
2006-10-07 03:37:01 · answer #1 · answered by Ranto 7 · 0⤊ 0⤋
Total utility is an imaginary measure of total satisfaction a person derives from consuming quantities of a good. If that person were to consume one more unit of that good, then the additional satisfaction derived is the marginal utility.
2006-10-07 03:39:41 · answer #2 · answered by Einmann 4 · 1⤊ 0⤋
the best way i can explain it is by an example: say you buy 2 bottles of pepsi. your total utility is the utility you get from those two bottles of pepsi. the marginal utility is the utility you would get by purchasing one more bottle of pepsi. hope this is what you need
2016-03-28 00:50:11 · answer #3 · answered by Michele 4 · 0⤊ 0⤋
Yep I know,shouldn't you?
2006-10-07 03:32:40 · answer #4 · answered by Anonymous · 0⤊ 1⤋