
Distinguish between the total and
Introduction:
Marginal Utility- It is the utility derived from the consumption of one more or an additional unit of the good being consumed. It is calculated as the difference between the utility derived from the consumption of (n+1) the unit and that derived from the nth unit.
Total Utility- TU above stands for the total utility. It is the aggregate satisfaction that a consumer derives from the total consumption of the good being consumed. It is the sum of the marginal utilities of the individual units consumed.
Utils- The units in which utility is measure is called a util.

Explanation of Solution
Let us assume a hypothetical utility table that shows the utils of satisfaction that a consumer derives from the consumption of water.
Glasses of Water | Total Utility | Marginal Utility(utils) |
---|---|---|
1 | 10 | 10 |
2 | 22 (10 +12) | 12 |
3 | 37(22+15) | 15 |
4 | 50(37 +13) | 13 |
5 | 60(50+10) | 10 |
6 | 66(60+6) | 6 |
7 | 66(66+0) | 0 |
8 | 58(66-8) | -8 |
It can be seen from the table above that as the consumer consumes the first glass of water the utility derived is 10 utils. It increases consecutively to 12 and 15 in the next two glasses. This is so because the consumer is too thirsty and tired and needs the water. The first glass triggers his thirst. That is the reason the next to glasses yield increasing level of satisfactionto him. However, once he has had the third glass he begins to feel less thirsty. It can be seen that every additional glass of water gives him less satisfaction than the previous glass. The seventh glass gives him no satisfaction at all as he is not thirsty anymore. The MU of the seventh glass is 0. If he consumes another glass of water, the water gives him dissatisfaction and discomfort instead of giving him satisfaction. The MU derived from the eighth glass is -8 reducing the total utility to 58.
Want to see more full solutions like this?
Chapter 20 Solutions
Economics Today: The Micro View (18th Edition)
- how commond economies relate to principle Of Economics ?arrow_forwardCritically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forwardCritically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forward
- Outline the nine (9) consumer rights as specified in the Consumer Rights Act in South Africa.arrow_forwardIn what ways could you show the attractiveness of Philippines in the form of videos/campaigns to foreign investors? Cite 10 examples.arrow_forwardExplain the following terms and provide an example for each term: • Corruption • Fraud • Briberyarrow_forward
- In what ways could you show the attractiveness of a country in the form of videos/campaigns?arrow_forwardWith the VBS scenario in mind, debate with your own words the view that stakeholders are the primary reason why business ethics must be implemented.arrow_forwardThe unethical decisions taken by the VBS management affected the lives of many of their clients who trusted their business and services You are appointed as an ethics officer at Tyme Bank. Advise the management regarding the role of legislation in South Africa in providing the legal framework for business operations.arrow_forward
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education





