1. What is Marginal Utility?

Marginal Utility (MU) is the additional satisfaction or benefit a consumer gains from consuming one more unit of a good or service. It's a fundamental concept in microeconomics that helps explain consumer choice behavior.

2. How Does the Calculator Work?

The calculator uses the Marginal Utility formula:

Where:

• \( MU \) — Marginal Utility (utils/unit)
• \( \Delta TU \) — Change in Total Utility (utils)
• \( \Delta Q \) — Change in Quantity (units)

Explanation: The formula calculates how much additional utility is gained per additional unit consumed.

3. Importance of Marginal Utility

Details: Understanding marginal utility helps explain the law of diminishing returns, consumer equilibrium, and forms the basis for demand curves in economics.

4. Using the Calculator

Tips: Enter the change in total utility (in utils) and the change in quantity consumed (in units). The change in quantity cannot be zero.

5. Frequently Asked Questions (FAQ)

Q1: What are utils?
A: Utils are hypothetical units of measurement for utility (satisfaction) used in economic theory to quantify consumer preferences.

Q2: What does negative marginal utility mean?
A: Negative MU means consuming an additional unit actually decreases total satisfaction, which can happen with overconsumption.

Q3: What is the law of diminishing marginal utility?
A: The principle that as a person consumes more units of a good, the additional satisfaction from each new unit tends to decrease.

Q4: How is MU related to demand?
A: Consumers will purchase more units as long as MU > price. The point where MU = price is the optimal consumption level.

Q5: Can MU be zero?
A: Yes, when consuming an additional unit provides no additional satisfaction (but doesn't decrease satisfaction either).