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

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Presentation on theme: "Marginal utility and consumer surplus. Total and marginal utility Marginal utility and consumer surplus."— Presentation transcript:

1 Marginal utility and consumer surplus

2 Total and marginal utility Marginal utility and consumer surplus

3 Darren’s utility from consuming crisps (daily) Packets of crisps TU in utils 01234560123456 0 7 11 13 14 13 Utility (utils) Packets of crisps consumed (per day) TU

4 Packets of crisps TU in utils 01234560123456 0 7 11 13 14 13 MU in utils - 7 4 2 1 0 Utility (utils) Packets of crisps consumed (per day) TU Darren’s utility from consuming crisps (daily)

5 Packets of crisps TU in utils 01234560123456 0 7 11 13 14 13 MU in utils - 7 4 2 1 0 Utility (utils) Packets of crisps consumed (per day) TU MU Darren’s utility from consuming crisps (daily)

6 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)

7 Consumer surplus Marginal utility and consumer surplus

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

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

10 MU P1P1 Q1Q1 O Consumer surplus MU, P Q

11 MU Totalconsumerexpenditure P1P1 Q1Q1 O Consumer surplus MU, P Q

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

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