Marginal Utlity

Front 1

Def of marginal utility

Back 1

This is a theory of consumer behaviour that analyses individual satisfaction.

This examines the additional satisfaction gained from additional unit of a product consumed at a particular moment of time

Front 2

Def of utility

Back 2

This is the satisfaction obtained from the consumption of a product in a particular moment in time

Front 3

Def of total utility

Back 3

This is the totally satisfaction obtained from consuming all units of a product a particular moment of time

Front 4

Def of marginal utility and example

Back 4

This is the additional satisfaction obtained from consuming additional unity of a particular product weighing a particular moment of time

When individual consumes a given unit of product, for E.g. an individual from the field during a sunny day can consume up to 4 bottles of water. But the additional satisfaction obtained form each subsequent unit consumed diminishes. ( the first will give the highest utility )

Front 5

When will total utility be at maximum

Back 5

When MU=0, which means MU is positive, TU increases

Front 6

Characteristic of the consumer according to the theory

Back 6

This theory is based on the assumption that consumers are rational, have limited income and they aim at maximizing utility. ( consumers will. It consume when MU <0)

Front 7

What’s the unit if utility

Back 7

Utile