marginal utility is zero

marginal utility decreases

Life-saving procedures

what is it marginal utility

the criticisma of the law of diminishing marginal utility

The expected marginal utility of the next unit of water is diminishing.

Not possible. Law of Diminishing Marginal utility states that equal additions to a good provide smaller and smaller increases in utility, therefore marginal utility decreases.

If marginal utility is positive will you have total utility increase with additional consumption?

explain the difference between total utility and marginal utility

total utility and marginal utility are the same for the first unit of good consumed.

As a matter of fact, law of diminishing marginal rate of substitution conforms to the law of diminishing marginal utility.

According to law of diminishing marginal utility, as a consumer increases the consumption of a good, its marginal utility goes on diminishing.

On the contrary, if the consumption of a good decreases, its marginal utility goes on increasing.

explain the demerits of diminishing marginal utility

Marginal revenue/margina utility return from capital represents the benefit of capital. When determining the optimal amount of capital, we must take into account the point when marginal benefit = marginal cost. This optimises profit/utility.

at zero

Topic

Marginal Utility

Total Utility

1. Definition

Marginal utility is the extra satisfaction which a consumer gets from consuming additional units of goods.

Total utility is the sum of total satisfaction of a consumer derives from consumption of a particular good.

2. Feature

It can be negative.

It can't be negative.

3. Sloping

It is downward sloping.

It is upward sloping.

A consumer buys/consumes a product only if marginal utility derived from it is more than marginal utility of money. As he continues consuming the marginal utility derived from every additional unit goes on diminishing but marginal utility of money remains constant. Both utilities match at a place i.e; where marginal utility of product becomes equal to marginal utility of money the consumer stops consumption thus equilibrium is struck.

Total utility is the overall utility achieved by using any product while marginal utility is the increase/decrease in utility from use of one more unit of product.

Yes. Some objects and activities can generate negative marginal utility and lower total utility. For example, polluted air.

The paradox of value is explained by the concept of marginal utility, which states that the value of a good is determined by its marginal utility rather than its total utility. For example, water has a high total utility as it is essential for life, but its marginal utility is low because in most situations there is an abundance of water. Conversely, diamonds have a low total utility but a high marginal utility due to their scarcity, leading to a higher market value despite their limited practical use.

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How would you answer if someone says that “marginal utility theory is

useless because utility cannot be observed”?

utility: means a level of satsfection. marginal utility:an extra unit gain my consumer/consumation of addational unit. deminishing marginal utility:when a person reachs his max level of satsfection by consuming a specific product then his utility will be falling by incresing the rate of consuming goods. diminishng marginal return & Diminishing marginal utility is same.

as we move down on the demand curve, marginal utility of a commodity starts declining bcoz of the law of diminishing marginal utility.after getting full satisfaction from a commodity both demand and marginal utility of that commodity decreases.

Law of Equi-Marginal Utility explains how a consumer can get maximum satisfaction out of his expenditure on different goods.

Total Utility can mean the total amount of satisfaction gained from the purchase or consumption of a product.

Marginal Utility is the amount of satisfaction gained from purchasing or consuming more of the same product.

For Example:

If you purchased two slices of Pizza, Your total utility would be the satisfaction you receive from consuming both slices. Your marginal utility would be the satisfaction you gained consuming an additional slice (i.e. The difference between consuming two slices versus one slice)

Typically your marginal utility decreases as your consumption increases.

For Example:

If you have eight pizzas, one extra slice is not likely to bring you as much satisfaction as a second slice would if you only had one slice of pizza (as opposed to eight pizzas).

Law of diminishing marginal utility states that equal additions to a good provide smaller and smaller increases in total utility, therefore marginal utility decreases. Lets use apples for an example. The first apple is very satisfying and adds a lot of utility, say 100 total utility. If you have a second apple, it is less satisfying, and adds 80 to make 180 total utility. A third apple adds only 50 utility, to make 230 total. Total utility is increasing at a decreasing rate. Therefore, the marginal utility (satisfaction) between each apple is decreasing, which illustrates the law of diminishing marginal utility.

decreasing marginal utility

Marginal utility is the satisfaction a consumer receives from consuming an additional unit of a good The indifference curve shows different combinations of 2 goods that the consumer is indifferent towards

Marginal utility is the additional satisfaction or benefit gained from consuming one more unit of a good or service. In economics, decision-making is influenced by marginal utility because individuals tend to allocate their resources towards goods or services that provide the highest marginal utility relative to their cost. This means that people will continue consuming a good or service until the marginal utility no longer outweighs the cost, helping them maximize their overall satisfaction or utility.

Total utility increases at a diminishing rate

The relationship between the marginal benefit of consuming a good and the overall satisfaction or utility derived from that consumption is that as you consume more of a good, the marginal benefit decreases while the overall satisfaction or utility increases at a decreasing rate. This is known as the law of diminishing marginal utility.

You maximize utility when marginal utility divided by the price of product A is equal to the marginal utility divided by the price of product B.

MUa/Pa=MUb/Pb

or MUa/MUb= Pa/Pb

The importance of the equi marginal utility is that it is used as a basis for the progressive taxation. The other importance is that it is used in the redistribution of income.

You maximize utility when marginal utility divided by the price of product A is equal to the marginal utility divided by the price of product B.

MUa/Pa=MUb/Pb

or MUa/MUb= Pa/Pb

Marginal utility slopes downward due to two assumptions:

1) Marginal utility satisfies Innada conditions [mathematical component].

2) Marginal utility is diminishing [economics component]. This means as a person consumes more of a good, their change in utility > 0 but is decreasing. As consumption -> infinity, utility is 0.

Summary: Slopes downward because utility is increasing at a decreasing rate.

Real-life example: the first slice of pizza you eat tends to be the most filling or 'the best'. However, as you eat more and more pizza, your happiness from eating the pizza is falling because you don't get as much benefit from it.

Will Be maximum when its marginal utility is Zero.

Yes, it is possible for marginal utility to be negative in economic theory. This occurs when consuming an additional unit of a good or service decreases overall satisfaction or utility.

I think this is the answer, based off my textbook, "Microeconomics" by Zupan and Browning.

Marginal benefit is the "...maximum amount the consumer would pay for an additional unit" of some good. The height of the demand curve can be interpreted as showing the marginal benefit of some good.

Marginal utility is the amount that total utility rises when consumption increases by one unit. For example if total utility for one scoop of ice cream is 10 units and totality utility for the second scoop of ice cream is 15 units, marginal utility measures the difference, 5 units, between the two.

people can be expected to satisfy their most pressing needs first, marginal utility normally declines with increasing availability of a good or service. A simple example is money. If someone has no money then $100 has a marginal utility of $100 to them, as they can be expected to spend it on the basic necessities of life. If someone already has $100,000, then $100 has very little marginal utility to them, perhaps far less than $100.

Allocative efficiency is an output level where the price equals the marginal cost of production. This is because the price that consumers are willing to pay is equivalent to the marginal utility that they get. Therefore the optimal distribution is achieved when the marginal utility of the good equals the marginal cost.

R.S Howey has written:

'The rise of the marginal utility school, 1870-1889' -- subject(s): Marginal utility, Economics, History

To find the marginal utility in economics, one can calculate the change in total utility when consuming one additional unit of a good or service. This can be done by dividing the change in total utility by the change in quantity consumed. The marginal utility helps determine the additional satisfaction gained from consuming one more unit of a good or service.

change in Total Utility over change in quantity (of the next unit)

Generally, yes. Marginal utility is the utility one gets out of "one more" of a good. For instance, if I have no food, my marginal utility of a loaf of bread is extremely high, so I will pay (price) a huge amount of money for it. On the other hand, if I have a pantry full of loafs of bread, my marginal utility for a loaf of bread would be very low, and I wouldn't buy bread unless it was extremely cheap.

i have know idea.....

The demand curve is negatively sloped because it is based on the principle of marginal utility and this utility decreases as consumption increases. The demand price which depends on the marginal utility of a good also declines as consumption increases, so quantity and price are inversely related, leading to the negative curve and the law of demand.

Marginal utility is the additional satisfaction or benefit gained from consuming one more unit of a good or service. It is important in economics because it helps determine consumer behavior and decision-making. By analyzing marginal utility, economists can understand how individuals allocate their resources and make choices based on maximizing their overall satisfaction or utility.