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Diminishing marginal utility and the teaching of economics: A note

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  • Todorova, Tamara

Abstract

This paper discusses how utility can be taught in undergraduate courses in microeconomics so that to illustrate total and marginal utility, the law of diminishing marginal utility, and consumer rationality. Diminishing marginal utility is essential in describing rational consumer behavior, overconsumption, and oversaturation to students of economics. We demonstrate a quadratic and a logarithmic total utility with the subsequent forms and shapes of marginal utility. From what it seems there is no contradiction between diminishing marginal utility in the univariate context of consuming one good and the indifference curve as the multivariate case of two goods consumed.

Suggested Citation

  • Todorova, Tamara, 2020. "Diminishing marginal utility and the teaching of economics: A note," EconStor Preprints 222942, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:222942
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    References listed on IDEAS

    as
    1. Timothy Dittmer, 2005. "Diminishing Marginal Utility in Economics Textbooks," The Journal of Economic Education, Taylor & Francis Journals, vol. 36(4), pages 391-399, October.
    2. Philippe Steiner, 2011. "The creator, human conduct and the maximisation of utility in Gossen's economic theory," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 18(3), pages 353-379.
    3. Chung‐Cheng Lin & Shi‐Shu Peng, 2019. "The role of diminishing marginal utility in the ordinal and cardinal utility theories," Australian Economic Papers, Wiley Blackwell, vol. 58(3), pages 233-246, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    total utility; marginal utility; indifference curve;
    All these keywords.

    JEL classification:

    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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