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3 cards from this section. Quick, good the night before a test.
What is total utility?
Think about how you feel after eating a meal.
Define marginal utility.
Consider what happens when you eat one more piece of candy.
What does total utility measure?
Consider your level of happiness after eating a meal versus one bite.
True or false: Marginal utility always increases as more units are consumed.
Think of how you feel after several servings of food.
A consumer derives a total utility of 60 from consuming 6 oranges and 54 from 5 oranges. Calculate the marginal utility of the 6th orange. Discuss how the marginal utility affects their consumption choices.
Think about how satisfaction changes as you continue eating.
Explain how understanding marginal utility can help businesses in setting prices for products. Provide an example with your reasoning.
Consider how restaurants might price their 'all-you-can-eat' specials.
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