In order to calculate total utility (TU) from given levels of marginal utility (MU), one has to?

Analyze the question: You are given marginal utility (MU) values at different levels of consumption, and you must find total utility (TU).

Concept:

• Total utility (TU) is the total satisfaction a consumer gets from consuming a number of units of a good.
• Marginal utility (MU) is the extra satisfaction from consuming one more unit.
• MU = ΔTU / ΔQ, so MU = TUₙ − TUₙ₋₁.
• Rearranging gives TUₙ = TUₙ₋₁ + MUₙ.
• This means TU is the running sum (cumulative total) of the MUs: TU = ΣMU.

Worked example:

| Units | MU | TU (sum of MUs) | |---|---|---| | 1 | 10 | 10 | | 2 | 8 | 10 + 8 = 18 | | 3 | 6 | 18 + 6 = 24 | | 4 | 4 | 24 + 4 = 28 |

TU is found by adding the MU values from the various levels.

Checking the options:

• A. Subtracting MU from TU gives the previous TU, not the TU we want. ✗
• B. Adding MU from the various levels gives TU. ✓
• C. Multiplying MU by the initial TU has no meaning in utility theory. ✗
• D. Dividing current MU by previous MU gives a ratio, not total satisfaction. ✗

Exam tip: Remember "TU = ΣMU": total is the sum of the marginals. When MU is positive, TU rises. When MU is zero, TU is at its maximum. When MU is negative, TU falls.