Marginal Utility Total Utility Utility.pptx

Marginal Utility Total Utility Economics Utility

1. Welcome to My Presentation

2. Presentation on Marginal Utility Presented by: Md. Sazzad Hossain Shimul 1 st Year 2 nd Semester Session: 2019-2020 Roll no: 2010748152 Department of Public Administration University of Rajshahi

3. Utility Utility is the power of commodity to satisfy human Wants satisfaction received from consuming a good or service

4. Total Utility The Total Satisfaction derive from the consumption of all the units of a commodity. Consumption of “n” units of commodity, then the total utility (TU) TUn = U1 +U2+U3+……………+Un or TU=  

5. Marginal Utility Marginal utility refers to the additional utility derived from the consumption of an additional unit of a commodity. It is an addition made to the total utility by consuming one more unit of a commodity.

6. Law of Diminishing Marginal Utility Law of Diminishing Marginal Utility state that's as we consume more and more units of a commodity, the utility derived from each successive unit goes on decreasing.

7. Level of Satisfaction

8. Law of Diminishing Marginal Utility Unit(Pizza slice)   Total Utility Marginal Utility 1  6 6 2  10 4 3  12 2 4  12 5  10 -2 6  6 -4

9. TU Diagrammatic Representation of Law of Diminishing Marginal Utility

10. Basic Assumptions of the Law:  Cardinal measurement of utility Consumption of reasonable quantity Continuous consumption No change in Quality Rational consumer Independent utilities Fixed Income and prices Marginal Utility of money remains constant The law of DMU operates under certain specific conditions. Economists call them the ‘assumptions’ of this law .

11. Limitation of the Law:  Suitable Units Suitable Time No Change in consumers Tastes Normal Persons Constant Income and Price Rare Collectsions Consumption of Liquor Not Applicable to Money

12. Thank You Everyone