मराठी
CISCEISC (Commerce) Class 11
प्रश्नपत्रिका१७
संकल्पना स्पष्टीकरण आणि व्हिडिओ१९६
अभ्यासक्रम

Total Utility and Marginal Utility

Advertisements

Topics

  • Introduction
  • Definition: Marginal Utility
  • Definition: Total Utility
  • Total Utility vs. Marginal Utility 
  • Formula: Total Utility
  • Formula: Marginal Utility
  • Formula: Marginal Utility When More Than One Unit is Added
  • Types of Marginal Utility
  • Real-Life Application
  • Key Points: Total Utility and Marginal Utility
CISCE: Class 12

Introduction

  1. Total Utility (TU): Total satisfaction from all units consumed.
  2. Marginal Utility (MU): Extra satisfaction from adding one more unit.
CISCE: Class 12

Definition: Marginal Utility

  • "The marginal utility which results from a unit increase in consumption." -Prof. Boulding
  • "Marginal utility is an addition made to total utility by consuming one more unit of a commodity." -Prof. Chapman
CISCE: Class 12

Definition: Total Utility

According to Prof. Leftwitch, "Total utility refers to the entire amount of satisfaction obtained from consuming various quantities of a commodity."

CISCE: Class 12

Total Utility vs. Marginal Utility

Total Utility Marginal Utility
1) Sum total of utilities from consuming all units of a good. 1) Addition made to total utility by consuming each extra unit.
2) Increases at a diminishing rate (gets added slower with more units). 2) Marginal utility decreases as each extra unit is consumed.
3) TU reaches a maximum and then remains constant or falls. 3) At maximum TU (point of satiety), MU = 0.
4) TU declines if consumption continues beyond a certain point. 4) If MU becomes negative, TU will decrease (disutility).
5) TU helps determine the overall value and utility of a commodity. 5) MU determines optimal consumption: stop at MU = price/zero.
6) TU = sum of all MU values. 6) MU can be positive, zero, or negative.
Maharashtra State Board: Class 12
CISCE: Class 12

Formula: Total Utlity

Total Utility:
\[TU_n=MU_1+MU_2+...+MU_n\]

Maharashtra State Board: Class 12
CISCE: Class 12

Formula: Marginal Utility

Marginal Utility:
\[MU_n=TU_n-TU_{n-1}\]

Maharashtra State Board: Class 12
CISCE: Class 12

Formula: Marginal Utility When More Than One Unit Is Added

When more than one unit is added:
\[MU=\frac{\Delta TU}{\Delta Q}\]

CISCE: Class 12

Types of Marginal Utility

  • Positive MU: Extra unit adds satisfaction (TU increases).
  • Zero MU: No extra satisfaction (TU stops rising).
  • Negative MU: Satisfaction decreases (TU drops, you get “disutility”).
CISCE: Class 12

Real-Life Application

  • The first mango tastes best because you are hungry (high MU).
  • After a few, you feel less hungry, so extra mangoes are less satisfying.
  • If you eat too many, you might feel uncomfortable (negative MU).
Maharashtra State Board: Class 12
CISCE: Class 12

Key Points: Total Utility and Marginal Utility

  • Total utility = total happiness from all units.
  • Marginal utility = extra happiness from one more unit.
  • Marginal utility usually decreases as we consume more.
  • When marginal utility becomes zero, total utility is at its maximum.
  • If you keep consuming, marginal utility can turn negative (“too much of a good thing!”).

Test Yourself

Shaalaa.com | Total Utility and Marginal Utility

Shaalaa.com


Next video


Shaalaa.com


Total Utility and Marginal Utility [00:16:56]
S
Series: Series - 1
0%


Total Utility and Marginal Utility
00:16:56  undefined
Advertisements
Share
Notifications

Englishहिंदीमराठी
Login
Create free account


      Forgot password?
Course
Use app×