Difference between marginal and total utility

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Reference no: EM138296

Q. 1. What is the difference between marginal and total utility?

2. Can marginal utility be negative? Provide an example using your original thoughts and words.

3. Why is it not sufficient to just compare the marginal utility of two goods when maximizing utility?

4. Explain the income and substitution effects and use the concepts to describe what happens when the price of a product decreases.

5. Why would an ounce of gold be priced higher than an ounce of coffee beans though coffee is generally considered more essential than gold? Explain the paradox in terms of marginal and total utility.

Reference no: EM138296

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