Chapter 21, Problem 1E

To determine

(a)

Graphical representation of total utility.

Explanation of Solution

No. of utils	Marginal Utility	Total Utility
1st	300	300
2nd	250	550
3rd	220	770
4th	160	930
5th	100	1030
6th	50	1080
7th	20	1100
8th	0	1100
9th	-250	850

Economics Concept Introduction

Total Utility is defined as the aggregate of total satisfaction that a consumer consumes for a specific good or service.

Marginal utility is defined as the addition to the total utility which is derived after consuming an additional unit.

To determine

(b)

Graphical representation of Marginal utility.

Explanation of Solution

Economics Concept Introduction

Marginal utility is the addition to total utility when one more unit of good is consumed.

To determine

(c)

Marginal utility value at which total utility reach a maximum.

Explanation of Solution

At 8^TH unit, total utility is at its maximum and marginal utility is 0.

Economics Concept Introduction

Marginal utility is the addition to total utility when one more unit of good is consumed.