Question

define total utility

Answer 1

Total utility is the total satisfaction received from consuming a given totalquantity of a good or service, while marginal utility is the satisfaction gained from consuming another quantity of a good or service. Sometimes, economists like to subdivide utility into individual units that they call utils.

Answer 2

Utility is the satisfaction that a person derives from the consumption of a good or service.Total utility is the total satisfaction received from consuming a given total quantity of a good or service, while marginal utility is the satisfaction gained from consuming another quantity of a good or service. Sometimes, economists like to subdivide utility into individual units that they call utils. However, because utility is subjective, meaning that it differs from person to person, and because it varies continuously, depending on the quantity consumed, an util cannot actually be measured, but is simply a heuristic device that allows economists to talk about the degree of satisfaction of a product or service.

Although one definition of utility is usefulness, usefulness is not a quality in economic utility. For instance, water is very useful, but doesn't have much utility for most people. On the other hand, judging by recent gold prices in the market, gold has great utility for some people, but it is not very useful.

One quality of marginal utility is that it always declines for each successive quantity consumed of a particular good. If you like ice cream, and you eat one scoop, the first scoop will provide the greatest satisfaction. If you eat another scoop, you'll probably enjoy that also, but the satisfaction will be less than for the first. At some point, you will not want any more ice cream. The marginal utility will drop to zero and will even become negative. This is an everyday illustration of the law of diminishing marginal utility. Marginal utility declines for everything, including money. Although many people want to amass great wealth, each dollar that is accumulated becomes worth less and less, because the marginal utility of what it can buy declines.