Marginal utility and consumer surplus. Total and marginal utility Marginal utility and consumer surplus.

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Presentation transcript:

Marginal utility and consumer surplus

Total and marginal utility Marginal utility and consumer surplus

Darren’s utility from consuming crisps (daily) Packets of crisps TU in utils Utility (utils) Packets of crisps consumed (per day) TU

Packets of crisps TU in utils MU in utils Utility (utils) Packets of crisps consumed (per day) TU Darren’s utility from consuming crisps (daily)

Packets of crisps TU in utils MU in utils Utility (utils) Packets of crisps consumed (per day) TU MU Darren’s utility from consuming crisps (daily)

MU  TU = 2  Q = 1 MU =  TU /  Q = 2/1 = 2 Utility (utils) Packets of crisps consumed (per day) TU Darren’s utility from consuming crisps (daily)

Consumer surplus Marginal utility and consumer surplus

Tina’s marginal utility from petrol a b c MU, P (pence per litre) Q (litres per annum) MU

a b c MU, P (pence per litre) Q (litres per annum) Consumersurplus MU Tina’s marginal utility from petrol

MU P1P1 Q1Q1 O Consumer surplus MU, P Q

MU Totalconsumerexpenditure P1P1 Q1Q1 O Consumer surplus MU, P Q

Consumer surplus MU Totalconsumerexpenditure Total consumer consumer surplus surplusTotal consumer consumer surplus surplus P1P1 Q1Q1 MU, P Q O