Quick wins for a faster PC:
Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Diminishing marginal utility is the tendency for each additional unit of something a person consumes to provide less extra satisfaction than the previous one. For example, when you are hungry, a first slice of pizza may be more satisfying than a sixth. The principle describes a pattern in an individual consumer’s choices; it does not claim that everyone values the same things in the same way.
What do utility, total utility, and marginal utility mean?
- Utility is the satisfaction or benefit a consumer gets from a good or service. It is subjective: people can value the same thing differently.
- Total utility is the overall satisfaction associated with the quantity consumed in a textbook model.
- Marginal utility is the additional utility from consuming one more unit. For discrete units, it can be expressed as the change in total utility divided by the change in quantity.
OpenStax defines the pattern as a decline in the additional utility from each successive unit as a person receives more of a good. OpenStax, Principles of Economics 3e, section 2.1.
| # | Preview | Product | Price | |
|---|---|---|---|---|
| 1 |
|
Principles of Economics | $270.79 | Buy on Amazon |
| 2 |
|
Basic Economics: A Common Sense Guide to the Economy | $25.49 | Buy on Amazon |
| 3 |
|
Economics For Dummies: Book + Chapter Quizzes Online | $17.49 | Buy on Amazon |
| 4 |
|
Principles of Economics | $177.99 | Buy on Amazon |
| 5 |
|
Understanding Economics, Student Edition (ECONOMICS PRINCIPLES & PRACTIC) | $49.02 | Buy on Amazon |
How can marginal utility fall while total utility rises?
Marginal utility describes the extra benefit of the next unit, while total utility describes the overall benefit of all units consumed. If each additional unit adds a smaller amount of utility, total utility can still rise; it is simply rising more slowly. Total utility falls only if an additional unit contributes negative utility in the model.
What is an example of diminishing marginal utility?
Imagine eating while hungry. The first portion may satisfy a strong need, while another portion after you are full adds less. OpenStax illustrates the idea with successive slices of pizza and with a hypothetical consumer, José: in its example, his first T-shirt provides 22 utils and his fourth provides 18 additional utils. Those figures are invented teaching values, not measured satisfaction data. OpenStax, Principles of Economics 3e, section 2.2.
Do these 3 things before closing this tab:
1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problems#1 Best Overall
How does the principle affect consumer choices?
Consumers make choices with limited budgets, so the benefit of another unit must be considered alongside its price and the alternatives they give up. In the introductory model, a consumer may continue buying units while their marginal utility is worth the opportunity cost, then stop when another unit no longer offers a favorable tradeoff.
When comparing different goods, the model can compare marginal utility per dollar. A consumer can shift spending toward the good offering more additional utility for each dollar, subject to the budget and the assumptions of the model. This is a way to reason about choices, not a complete proof of every observed demand pattern. The textbook treats consumer choice in the context of budgets, prices, and tradeoffs. OpenStax, Principles of Economics 3e, section 2.1.
Rank #2
Can utility be measured in real units?
Textbooks sometimes use “utils” to make examples easier to follow, but utility is not a physical unit that an outside observer can use to measure happiness. The useful assumption is that a person can rank alternatives by preference. Hypothetical utils do not show that one person is a particular number of times happier than another, or allow a reliable comparison of satisfaction across people. OpenStax, Principles of Economics 3e, section 2.1.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How is diminishing marginal utility different from diminishing marginal returns?
Diminishing marginal utility concerns consumption: the extra satisfaction a consumer gets from another unit of a good tends to decline as consumption increases. Diminishing marginal returns concerns production: adding more of an input can eventually produce smaller increases in output, given other factors. The terms describe different sides of economic decision-making and are not interchangeable.
Quick Recap
Rank #4
Rank #3
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
