Question

Suppose that the marginal utility of the 3rd hot dog is 20 utils and the total utility of 3 hot dogs is 100 utils. What is the total utility you get from 2 hot dogs?

Answer 1

Total utility refers to the total amount of satisfaction received from the consumption of a specific units of a commodity.

Marginal utility is the additional utility obtained from the consumption of an additional unit of commodity. It is the addition to total utility when one more unit of good is consumed. It is calculated as-

Marginal utility of nth unit= Total utility from n units - Total utility from (n-1) units

Hence, according to the above formula,

Marginal utility of the 3rd hotdog= Total utility of 3 hotdogs - Total utility of 2 hotdogs

Substituting given values in the equation above-

20 utils= 100 utils - total utility of 2 hotdogs

Hence,

Total utility of 2 hotdogs= 100 utils - 20 utils

Total utility of 2 hotdogs= 80 utils

Hence, Total utility received from 2 hotdogs is 80 utils. ( Answer)