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Provide an example of a decision or choice you made that involved utility maximizing behavior and choices using Total Utility in your example.
Provide another example from your own experiences when you focused on maximizing marginal utility. This relates to utility of consuming one additional unit of a good or service. (As noted by the author over time both marginal utility and total utility will decrease of diminish).
Just some notes:
You have already made decisions that will generally maximize your total utility in the long run. A college degree hopefully will enable you to pursue a career in your chosen field, a new career start or perhaps earn promotions in your present job.
In economics we assume that individuals are rational and will always act and make choices that will maximize their utility.
Marginal utility involves choices related to the additional consumption of one additional unit. Marginal utility diminishes as we consume more and more units of a good or service ultimately becoming zero at the point when Total Utility is maximized.
In economics we also assume that human nature will make “rational” choices when faced with decisions for example that requires a choice between two goods. This is known as an either/or decision.
For example a new college graduate choosing a job offer from company A or Company B.
Opportunity costs are always involved. The opportunity to begin your career with Company A means that you forgo an opportunity to work for Company B
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