Marginal Utility Tables
Table 2 shows how marginal utility changes with changing consumption of the two goods.
Table 2
|
Water |
Diamonds |
|
Total
Utility |
Marginal
Utility |
Total
Utility |
Marginal
Utility |
| 0 |
0 |
0 |
| 1,000,000 |
15 |
| 1 |
1,000,000 |
15 |
| 100 |
14 |
| 2 |
1,000,100 |
29 |
| 10 |
13 |
| 3 |
1,000,110 |
42 |
| 1 |
12 |
| 4 |
1,000,112 |
54 |
| 0 |
10 |
| 5 |
1,000,113 |
64 |
As we look at the table, we can see that the marginal utility for each good decreases as the consumption of the good increases. Put otherwise, the more diamonds we consumer, the less an additional diamond adds to our total utility. Similarly, the more water we consume, the less an additional gallon of water adds to our total utility. The utility of each good increases as we consumer more of it, but the utility increases at a decreasing rate. The marginal utility is that rate.
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