Answer to Question #213348 in Microeconomics for Mubashir Ameenudee

Question

How are total utility and marginal utility curves related? ‘If we know a total utility schedule, we can derive a marginal utility schedule and vice versa.’ Is this correct? Give reasons.

Answer 1

Total utility is the total satisfaction received from consuming a given total quality of a good while marginal utility is the satisfaction gained from consuming an additional quantity of that item.

The total utility curve and the marginal utility curve are related in that when marginal utility declines, the total utility curve increases but at a diminishing rate. When marginal utility reaches zero, the total utility decreases and it declines when marginal utility curve becomes negative.

Yes it is correct that if we know the total utility schedule, we can derive a marginal utility schedule and vice versa.

The reason is to know and record when the total utility increases quantity of a single item and when marginal utility of such an item decreases. Secondly, to understand the law of diminishing power between the total utility and the marginal utility.