- Total Utility
- The aggregate level of satisfaction or fulfillment that a consumer receives through the consumption of a specific good or service. Each individual unit of a good or service has its own marginal utility, and the total utility is simply the sum of all the marginal utilities of the individual units. Classical economic theory suggests that all consumers want to get the highest possible level of total utility for the money they spend.
To better understand total utility, one must understand the law of diminishing marginal utility, which states that as more of a single good or service is consumed, the additional (marginal) satisfaction drops. The first good consumed provides the highest marginal utility, the second good has a lower marginal utility, and so on. Therefore, total utility grows less rapidly with each additional unit of the same good or service.
In order to maximize total utility (which is the inherent goal of all consumers), consumers will look to combine different combinations of goods and services. Given their limited resources (money), consumers will make choices in an attempt to increase their total utility with each additional unit of consumption.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
total utility — noun : the degree of utility of an article, service, or other economic good considered as a whole compare marginal utility … Useful english dictionary
Total Utility Costs — Total direct and indirect utility costs … Energy terms
Total DSM Cost — Total utility and nonutility costs … Energy terms
utility and value — ▪ economics Introduction in economics, the determination of the prices of goods and services. The modern industrial economy is characterized by a high degree of interdependence of its parts. The supplier of components or raw materials … Universalium
Utility — This article is about the economic concept. For other uses, see Utility (disambiguation). Part of a series on Utilitarianism … Wikipedia
Utility monster — The utility monster is a thought experiment in the study of ethics. It was created by philosopher Robert Nozick in 1974 as a criticism of utilitarianism. In the thought experiment, the idea of a monster is proposed who can turn resources into his … Wikipedia
Total Physical Response — (TPR) is a method developed by Dr. James J. Asher, a professor emeritus of psychology at San José State University, to aid learning second languages. The method relies on the assumption that when learning a second or additional language, that… … Wikipedia
Total Community Action — Total Community Action, Inc. (TCA) is a non profit community agency in New Orleans founded in 1964 to address the needs of disadvantaged residents.TCA services include early childhood development, utility assistance, home weatherization, job… … Wikipedia
Utility submeter — or other multi tenant property to bill tenants for individual measured utility usage.Fact|date=August 2008OverviewTypical users of submetering are mobile home parks, apartment complexes, and commercial buildings. Usually, utility submetering is… … Wikipedia
Utility maximization problem — In microeconomics, the utility maximization problem is the problem consumers face: how should I spend my money in order to maximize my utility? Basic setupSuppose their consumption set, or the enumeration of all possible consumption bundles that… … Wikipedia