Wize AP Microeconomics Textbook > Theory of Consumer Choice

Total and Marginal Utility

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Marginal Utility
Marginal utility is the additional utility from consuming one extra unit. The law of diminishing marginal utitlity tells us that as we consume more units of a good our marginal utility will always fall.

Marginal Utility= ∆ Total Utility∆Q\boxed{\text{Marginal\ Utility} =\ \frac{∆\ Total\ Utility}{∆Q}}Marginal Utility= ∆Q∆ Total Utility​​

Q      Total Utility     Marginal Utility
0              0                           -
1            100                   100
2            140                   40
3            150                   10
4            150                   0
5            145                   -5


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In the diagrams above, we can see that at a quantity of 1, 2 and 3 units the total utility is increasing
 and the marginal utility is positive
 .

At an output of 5 the total utility is decreasing
 and the marginal utility is negative
 .

At an output of 4 the total utility is at its maximum
 and the marginal utility is zero
.

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Example: Total and Marginal Utility

Total utility...

A) decreases when marginal utility decreases

B) is negative when marginal utility decreases

C) diminishes as marginal utility decreases

D) is decreasing when marginal utility is negative

E) is always lower than marginal utility

D.
When MU is negative (that means you've had way too many milkshakes and you got sick!), then increasing consumption actually leads to less total utility.