00:01
To maximize one utility, you should continue to purchase a good until which of the following occurs.
00:14
So the maximum utility is when we derive the most satisfaction or utility from each additional good.
00:34
So we buy one more of a good, and we get the most satisfaction from adding one more.
00:54
The marginal utility is the additional.
00:58
Utility that we gain from each additional unit purchase.
01:34
So as marginal utility goes up, our total utility goes up.
01:52
So each time we purchase a good, we add the marginal utility, and then the total utility, it's just going to be the sum of the utility up until that point.
02:04
So total utility increases at a decreasing rate.
02:25
So the graph of total utility is going to be increasing, but it will be a decreasing rate.
02:33
So the graph looks like this.
02:38
This is because of the law of diminishing marginal utility.
02:59
So marginal utility decreases with, each additional unit purchased...