Distinguish between the concepts of total utility and marginal utility.

THE CONCEPT OF UTILITY

L E A R N I N G O B J E C T I V E S

1. Define what economists mean by utility.

2. Distinguish between the concepts of total utility and marginal utility.

3. State the law of diminishing marginal utility and illustrate it graphically.

4. State, explain, and illustrate algebraically the utility-maximizing condition.