Speaker

In: Social Issues

Submitted By mohammedsalia
Words 357
Pages 2
ECON 102

MARGINAL UTILITY

The cardinalist approach to consumer behaviour assumes that the utility (i.e. the satisfaction or benefit) obtained from consuming a unit of a good can be measured.

1. Define the following terms:
a) total utility
b) marginal utility.

2. Consider the following information regarding the utility Jack obtains from consuming cream cakes on a visit to a cafe.

|No. of cream cakes |Total utility |Marginal utility |
|0 |0 | |
| | > | |
|1 |40 | |
| | > | |
|2 |80 | |
| | > | |
|3 |110 | |
| | > | |
|4 |130 | |
| | > | |
|5 |140 | |
| | > | |
|6 |140 |…...

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