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Short Answer Questions · Q5

Q.Distinguish between Total Utility and Marginal Utility.

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✓ Free question

Total Utility (TU) is the sum total of satisfaction a consumer derives from consuming a given quantity of a good in a given period — it is the running total of the utility contributed by every unit consumed so far, so TUn=MU1+MU2+⋯+MUnTU_n = MU_1 + MU_2 + \dots + MU_n. Marginal Utility (MU), by contrast, is only the extra satisfaction added by the most recent unit — MUn=TUn−TUn−1MU_n = TU_n - TU_{n-1}. The two are related in a fixed way: TU keeps increasing as long as MU stays positive (though usually at a diminishing rate, per the Law of DMU); TU reaches its maximum exactly at the unit where MU becomes zero (the point of satiety); and TU starts falling once MU becomes negative, because an additional unit is now actively reducing satisfaction. A further practical difference: TU can never fall while MU is positive, but MU itself falls continuously from the very first unit onward under the Law of Diminishing Marginal Utility, even while TU is still rising.

✓Final answer

TU is the cumulative satisfaction from all units consumed (rises while MU > 0, maximum when MU = 0, falls when MU < 0); MU is only the extra satisfaction from the single latest unit, and it diminishes unit after unit under the Law of DMU.

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