Saved Bookmarks
| 1. |
Define the following terms: (1) Marginal utility, (2) Total utility, (3) Initial utility |
|
Answer» Solution :a) In economics, utility is the SATISFACTION or benefit derived by consuming a product; thus the marginal utility of a goods or service is the change in the utility from an increase in the consumption of that good or service. b) 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 an additional quantity of a particular good or service. c) Initial utility is the utility derived from the consumption of the first unit of a commodity.It is always positive.For example, if a consumer starts EATING bread the utility he gets from first unit is called initial utility. This conversation is already CLOSED by Expert. |
|