BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

Solutions

Chapter
Section
BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Give a numerical example that illustrates total utility rising as marginal utility declines.

To determine

Explain the relation between the total utility and the marginal utility.

Explanation

The total utility is the overall satisfaction accrued by a consumer from all the units of a commodity, whereas the marginal utility is the additional utility accrued from consuming an additional unit. Therefore, as total utility increases, the marginal utility will decline. For example, Person E accrued $2 of utility from eating one banana and $1 of utility from eating the second banana. Hence, as the quantity increases from 1 banana to 2 bananas, the total utility increases from $2 to $3 (2+1), where the marginal utility is $1 (3-2). Hence, as the total utility rises, the marginal utility declines.

Concept

Total utility: The total utility is defined as the overall satisfaction that a consumer derives from consuming all units of a good or service over a given time period.

Marginal utility: Marginal utility is the additional utility derived from consuming one more unit of a good or service.

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the four objectives associated with ecoefficiency?

Cornerstones of Cost Management (Cornerstones Series)

What is a mutually exclusive project? How should managers rank mutually exclusive projects?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Find all the answers to your study problems with bartleby.
Textbook solutions plus Q&A. Get As ASAP arrow_forward