### Graphing Exercise: Total and Marginal Utility

Total utility is the amount of satisfaction one derives from consuming some particular amount of a good.  Marginal utility, on the other hand, measures the change in total utility from consuming one additional unit.  The law of diminishing marginal utility is the principle that, beyond some level of consumption, marginal utility declines as consumption increases.

 Exploration: How are total and marginal utility related?

This exercise includes two related graphs.  The upper graph illustrates the total utility associated with each quantity consumed and the lower graph illustrates the corresponding marginal utility.  To use the graph, move the slider left or right to change the quantity of the good consumed.  As you do, note the total and marginal utility values both visually and in the table.

1. Looking at the upper graph, describe how this consumer’s total utility is related to the amount consumed—does utility increase at a constant rate? At what consumption level is utility at its highest level?
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2. What total utility is achieved by consuming one unit? What is the marginal utility of the first unit?
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3. What is the marginal utility of the second unit of consumption?  How does this compare with the marginal utility of the first unit?  What is the total utility of the second unit and how does this compare with the total utility of the first unit?
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4. What happens to total utility when the seventh unit of the good is consumed? What is the marginal utility of the seventh unit of the good?
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5. Experiment on your own and generalize:  Total utility will increase if marginal utility is _____.  Diminishing marginal utility implies that each successive increase in total utility is _____.
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