A consumer's total utility (TU) schedule from consuming successive bottles of soft drink is presented in the table below: | Quantity of Soft Drink (Bottles) | Total Utility (TU in utils) | |---|---| | 1 | 40 | | 2 | 75 | | 3 | 102 | | 4 | 120 | | 5 | 130 | Based on the table above, what is the margi

A consumer's total utility (TU) schedule from consuming successive bottles of soft drink i… — JAMB UTME

A consumer's total utility ( $TU$ ) schedule from consuming successive bottles of soft drink is presented in the table below:

Quantity of Soft Drink (Bottles)	Total Utility ( $TU$ in utils)
1	40
2	75
3	102
4	120
5	130

Based on the table above, what is the marginal utility ( $MU$ ) derived from consuming the 4th bottle of soft drink?

Answer: 18 utils

Answer

The marginal utility derived from consuming the 4th bottle of soft drink is 18 utils.

Marginal Utility (

MU

) is defined as the additional utility derived from the consumption of one extra unit of a commodity. From the schedule, total utility increases from 102 utils to 120 utils when moving from 3 to 4 bottles. Thus,

MU_4 = 120 - 102 = 18

utils.

Step-by-Step Solution

Find total utility values from the schedule for

Q = 4

and

Q = 3

TU_4 = 120

utils and

TU_3 = 102

utils

Marginal utility measures the extra satisfaction gained from consuming one additional unit.

Apply the Marginal Utility formula

MU = \Delta TU / \Delta Q

MU_4 = 120 - 102 = 18

utils

Subtracting previous total utility from current total utility gives the additional utility contributed by the 4th unit.

Key Concept

Marginal Utility Calculation from Total Utility Schedule

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