You maximize utility when marginal utility divided by the price of product A is equal to the marginal utility divided by the price of product B.
MUa/Pa=MUb/Pb
or MUa/MUb= Pa/Pb
explain the difference between total utility and marginal utility
Will Be maximum when its marginal utility is Zero.
Topic Marginal Utility Total Utility 1. Definition Marginal utility is the extra satisfaction which a consumer gets from consuming additional units of goods. Total utility is the sum of total satisfaction of a consumer derives from consumption of a particular good. 2. Feature It can be negative. It can't be negative. 3. Sloping It is downward sloping. It is upward sloping.
Primarily cardinal utility approach has 5 assumptions. 1 rationality: the consumer is rational about his spending. 2 cardinal utility: the utility/satisfaction can be measured in cardinal NOs like 10, 8, 15, 20etc 3 constancy of money: The money of consumer must remain constant. 4 diminishing marginal utility: Marginal/additional utility of consumer decreases along with successive use of any commodity. 5 total utility: Total utility depends on quantity of commodity. 3
You maximize utility when marginal utility divided by the price of product A is equal to the marginal utility divided by the price of product B. MUa/Pa=MUb/Pb or MUa/MUb= Pa/Pb
chips
explain the difference between total utility and marginal utility
Will Be maximum when its marginal utility is Zero.
Topic Marginal Utility Total Utility 1. Definition Marginal utility is the extra satisfaction which a consumer gets from consuming additional units of goods. Total utility is the sum of total satisfaction of a consumer derives from consumption of a particular good. 2. Feature It can be negative. It can't be negative. 3. Sloping It is downward sloping. It is upward sloping.
Primarily cardinal utility approach has 5 assumptions. 1 rationality: the consumer is rational about his spending. 2 cardinal utility: the utility/satisfaction can be measured in cardinal NOs like 10, 8, 15, 20etc 3 constancy of money: The money of consumer must remain constant. 4 diminishing marginal utility: Marginal/additional utility of consumer decreases along with successive use of any commodity. 5 total utility: Total utility depends on quantity of commodity. 3
You maximize utility when marginal utility divided by the price of product A is equal to the marginal utility divided by the price of product B. MUa/Pa=MUb/Pb or MUa/MUb= Pa/Pb
i don't know the answer. i think it may be minimum or maximum.
when does consumer attain equilibrium under the utility approach
Minimize usage.
Average Utility is defined as the utility derived (or obttained) from the use of one unit of commodity. It is calculated by dividing the total number of utils by the number of units commodity is used by the consumer.
A rational consumer is a consumer who hesitates to be satisfied with the little amount he has. A rational consumer, therefore tries to maximises inorder to get its total utility. He might not decide to draw a scale of preference because he has alimited resources.
The optimal consumption bundle formula for maximizing utility in economics is known as the consumer equilibrium condition, which states that the consumer should allocate their budget in such a way that the marginal utility per dollar spent is equal across all goods and services. This can be mathematically represented as: MU1/P1 MU2/P2 ... MUn/Pn where MU represents the marginal utility of each good, P represents the price of each good, and n represents the number of goods in the consumption bundle. By achieving this balance, the consumer can maximize their overall satisfaction or utility.