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economics how to calculate marginal utility

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  • 08-05-2010 2:59pm
    #1
    GERMAN ROCKS
    Banned (with Prison Access) Posts: 1,796 ✭✭✭


    how do i do the following.= calculate the marginal utility

    pair of shoes ----total utility----marginal utility
    0
    - 0
    ?
    1
    69
    ?
    2
    112
    ?
    3 -
    125
    ?
    4 -
    133
    ?
    5 -
    140
    ?
    6 -
    110
    ?


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  • Options
    #2
    ciano1
    Registered Users Posts: 2,140 ✭✭✭ciano1


    GERMAN ROCKS wrote: »
    how do i do the following.= calculate the marginal utility

    pair of shoes ----total utility----marginal utility
    0
    - 0
    ?
    1
    69
    ?
    2
    112
    ?
    3 -
    125
    ?
    4 -
    133
    ?
    5 -
    140
    ?
    6 -
    110
    ?

    Isnt it the extra utility gained from each extra pair of shoes?

    0 0 0
    1 69 69
    2 112 43
    3 125 13
    4 133 8
    5 140 7
    6 110 -30??

    I might be wrong..But cant TOTAL utility only increase but MARGINAL utility can start to get smaller? ( Law of diminishing marginal utility)

    Someone correct me


  • Options
    #3
    Thoie
    Registered Users Posts: 6,344 ✭✭✭Thoie


    It may not help with you problem, but it amused me that before I clicked this post, the last thing I had read was this:

    http://www.ft.com/cms/s/2/23571378-58a7-11df-a0c9-00144feab49a.html


  • Options
    #4
    MavisDavis
    Closed Accounts Posts: 1,263 ✭✭✭MavisDavis


    GERMAN ROCKS wrote: »
    how do i do the following.= calculate the marginal utility

    pair of shoes ----total utility----marginal utility
    0
    - 0
    ?
    1
    69
    ?
    2
    112
    ?
    3 -
    125
    ?
    4 -
    133
    ?
    5 -
    140
    ?
    6 -
    110
    ?


    Right, see the total utility? It's the extra amount added on each time.

    So for the second pair of shoes it's 112 - 69 = 43.

    Third pair: 125 - 112 = 13

    Fourth pair: 133 - 125 = 8, etc.

    PS. The law of diminishing marginal returns sets in after they buy the second pair of shoes/when they buy the third pair of shoes here, because 13<43.

    Hope that helped!


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