Total Utility and Marginal Utility

Flashcards covering concepts related to total utility and marginal utility in economics.

Utility

The happiness or benefit consumers derive from consuming a good.

Util

An imaginary measurement used by economists to quantify happiness.

Law of Diminishing Marginal Utility

As consumers consume more of a particular good, the additional happiness they derive from each additional unit decreases.

Downward Sloping Demand

Explains that as the quantity of a good increases, consumers are willing to pay less for additional units.

Negative Utility

When utility is less than zero, explaining that consumers benefit less from additional units.

Total Utility

The overall satisfaction received from consuming a good.

Marginal Utility

The additional satisfaction or benefit gained from consuming one more unit of a good.

Example of Diminishing Marginal Utility

The first scoop of ice cream might be worth $4, but additional scoops are valued less.