Anonymous
more than 4 weeks ago
Using examples and diagrams, distinguish between total utility and marginal utility.
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ChatGPT
more than 4 weeks ago
Total utility refers to the total satisfaction or benefit a consumer receives from consuming a certain quantity of a good or service. It is the sum of the marginal utilities of each unit consumed. For example, if a person eats three slices of pizza and gains 20 units of satisfaction from the first slice, 15 units from the second slice, and 10 units from the third slice, the total utility would be 45 units.
On the other hand, marginal utility refers to the additional satisfaction or benefit a consumer receives from consuming one more unit of a good or service. It is the change in total utility that results from consuming an additional unit. Using the same example of pizza, if the marginal utility of the first slice is 20 units, the marginal utility of the second slice is 15 units, and the marginal utility of the third slice is 10 units.
In the diagram below, the total utility curve is upward sloping, indicating that as more units of a good are consumed, total utility increases. The marginal utility curve is downward sloping, showing that as more units are consumed, the additional satisfaction gained from each unit decreases.
Total Utility
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-------------------------> Quantity
Marginal Utility
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In summary, total utility represents the overall satisfaction gained from consuming a certain quantity of a good, while marginal utility represents the additional satisfaction gained from consuming one more unit of that good.
On the other hand, marginal utility refers to the additional satisfaction or benefit a consumer receives from consuming one more unit of a good or service. It is the change in total utility that results from consuming an additional unit. Using the same example of pizza, if the marginal utility of the first slice is 20 units, the marginal utility of the second slice is 15 units, and the marginal utility of the third slice is 10 units.
In the diagram below, the total utility curve is upward sloping, indicating that as more units of a good are consumed, total utility increases. The marginal utility curve is downward sloping, showing that as more units are consumed, the additional satisfaction gained from each unit decreases.
Total Utility
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-------------------------> Quantity
Marginal Utility
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-------------------------> Quantity
In summary, total utility represents the overall satisfaction gained from consuming a certain quantity of a good, while marginal utility represents the additional satisfaction gained from consuming one more unit of that good.
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Google Gemini AI
more than 4 weeks ago
Total Utility
- The sum of the satisfaction derived from all units of a good or service consumed.
- Represented by the area under the total utility curve.
Example:
Suppose you consume 5 units of apples. The total utility from consuming these apples is:
```
Total utility = 15
```
Diagram:
[Image of total utility curve]
Marginal Utility
- The additional satisfaction derived from consuming one more unit of a good or service.
- Represented by the slope of the total utility curve.
Example:
Continuing from the previous example, the marginal utility of consuming the 6th apple is:
```
Marginal utility = 2
```
This means that the additional satisfaction gained from consuming the 6th apple is 2 units.
Diagram:
[Image of total utility curve with marginal utility line]
Key Differences
| Feature | Total Utility | Marginal Utility |
|---|---|---|
| Definition | Sum of satisfaction from all units consumed | Additional satisfaction from one more unit |
| Measurement | Area under total utility curve | Slope of total utility curve |
| Relationship | Decreasing with increasing consumption | Typically decreasing with increasing consumption |
Note:
- Total utility is a stock variable, while marginal utility is a flow variable.
- Total utility can be negative, while marginal utility is always non-negative.
- The sum of the satisfaction derived from all units of a good or service consumed.
- Represented by the area under the total utility curve.
Example:
Suppose you consume 5 units of apples. The total utility from consuming these apples is:
```
Total utility = 15
```
Diagram:
[Image of total utility curve]
Marginal Utility
- The additional satisfaction derived from consuming one more unit of a good or service.
- Represented by the slope of the total utility curve.
Example:
Continuing from the previous example, the marginal utility of consuming the 6th apple is:
```
Marginal utility = 2
```
This means that the additional satisfaction gained from consuming the 6th apple is 2 units.
Diagram:
[Image of total utility curve with marginal utility line]
Key Differences
| Feature | Total Utility | Marginal Utility |
|---|---|---|
| Definition | Sum of satisfaction from all units consumed | Additional satisfaction from one more unit |
| Measurement | Area under total utility curve | Slope of total utility curve |
| Relationship | Decreasing with increasing consumption | Typically decreasing with increasing consumption |
Note:
- Total utility is a stock variable, while marginal utility is a flow variable.
- Total utility can be negative, while marginal utility is always non-negative.
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