Derive TU Schedule from MU Schedule. Amount Consumed MU (units) 1 (utils) 14 2 12 10 4 8

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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**Title: Derive Total Utility (TU) Schedule from Marginal Utility (MU) Schedule**

The provided table shows the relationship between the amount of a commodity consumed and the marginal utility (MU) derived from each unit. Use this schedule to construct the Total Utility (TU) schedule.

| Amount Consumed (units) | MU (utils) |
|-------------------------|------------|
| 1                       | 14         |
| 2                       | 12         |
| 3                       | 10         |
| 4                       | 8          |
| 5                       | 6          |

### Instructions:

1. **Understanding MU:** Marginal Utility refers to the additional utility gained from consuming an extra unit of a good.

2. **Calculating TU:** To find the total utility, sum up the marginal utilities of all units consumed.

3. **Example Calculation:**
   - For 1 unit consumed, TU = 14
   - For 2 units consumed, TU = 14 (from the first unit) + 12 (from the second unit) = 26
   - Continue this process to calculate TU for all units. 

By performing this calculation, you’ll derive the entire Total Utility schedule, demonstrating how satisfaction or utility increases with more consumption, though often at a decreasing rate.
Transcribed Image Text:**Title: Derive Total Utility (TU) Schedule from Marginal Utility (MU) Schedule** The provided table shows the relationship between the amount of a commodity consumed and the marginal utility (MU) derived from each unit. Use this schedule to construct the Total Utility (TU) schedule. | Amount Consumed (units) | MU (utils) | |-------------------------|------------| | 1 | 14 | | 2 | 12 | | 3 | 10 | | 4 | 8 | | 5 | 6 | ### Instructions: 1. **Understanding MU:** Marginal Utility refers to the additional utility gained from consuming an extra unit of a good. 2. **Calculating TU:** To find the total utility, sum up the marginal utilities of all units consumed. 3. **Example Calculation:** - For 1 unit consumed, TU = 14 - For 2 units consumed, TU = 14 (from the first unit) + 12 (from the second unit) = 26 - Continue this process to calculate TU for all units. By performing this calculation, you’ll derive the entire Total Utility schedule, demonstrating how satisfaction or utility increases with more consumption, though often at a decreasing rate.
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