satisfactory of many things, how you calculate the satisfactory of a customer

1. Marginal Utility
Approach
Group 4

2. Marginal Utility Approach
In economics, the marginal utility of a
good or service is the gain from an
increase, or loss from a decrease, in the
consumption of that good or service.

3. Marginality Utility
• Average amount of satisfaction gained from consuming a
good
• Total amount of satisfaction gained from consuming a
good
• Addition satisfaction gained from consuming one more
unit of a good
• Total amount of satisfaction gained from consuming a
product divided by the number of goods consumed
• Total amount of satisfaction gained from consuming a
good times the number of goods consumed

4. Marginality
The term marginal refers to a small change
Frequently the marginal change is assumed to start
from the endowment, meaning the total resources
available for consumption
This endowment is determined by many things
including physical laws (which constrain how forms
of energy and matter may be transformed), accidents
of nature (which determine the presence of natural
resources), and the outcomes of past decisions
made by the individual himself or herself and by
others.

5. it is often assumed in neoclassical
analysis that goods and services
are continuously divisible. Under this
assumption, marginal concepts, including
marginal utility, may be expressed in terms
of differential calculus. Marginal utility can
then be defined as the first derivative of the
total satisfaction obtained from consumption
of a good or service, with respect to the
amount of consumption of that good or
service.
Neoclassical economics is a set of approaches to economics focusing on the
determination of prices, outputs, and incomedistributions in markets through supply and
demand. This determination is often mediated through a hypothesized maximization of
utility by income-constrained individuals and of profits by firms facing production costs
and employing available information andfactors of production, in accordance with rational
choice theory.[1]

6. Utility Theory
• Utility is want or pleasure satisfying characteristic
of a good or service.
• Utility is measured in units of measurement called
“utils”.
• Utility analysis is the investigation of how
consumers reach decisions to achieve utility
maximation.
• Utility is measured ordinally.

7. Total Utility
• Total Utility is the total amount of utility
one derives from consuming goods or
services.
• Total Utility decreases or diminishes
overtime.

8. Economists, sometimes speak of a law
of diminishing marginal utility,
meaning that the first unit of
consumption of a good or service yields
more utility than the second and
subsequent units, with a continuing
reduction for greater amounts. The
marginal decision rule states that a good
or service should be consumed at a
quantity at which the marginal utility is
equal to the marginal cost.

9. What is meant by Marginal Utility?
Marginal Utility is an economic concept because
economics use it to determine how much of an
item a consumer will buy.
Positive Marginal Utility is when the consumption
of an additional item increases the total utility.
In Economics, the additional satisfaction or
benefit (utility) that a consumer derives from
buying an additional unit of a commodity or
service.

10. Marginal Utility Calculation
Marginal Utility =
No. of units of consumption
Total Utility
Marginal Utility =
Changes in Total
Utility
Change in No. of Units
Consumed
Marginal Utility =
TU2 -- TU1
C2 -- C1

11. Example of Utility

13. Macroeconomics

14. ( from the Greek word prefix makro means “Large” and Economics
)
Is a branch of economics dealing
with the performance, structure,
behavior and decision making of the
economy as a whole, rather than
individual markets.

15. 2 areas of research that are emblematic of the discipline:
1.The attempt to understand the causes and
consequences of short-run fluctuations in
national income (the business cycle)
2.The attempt to understand the determinants
of long-run economic growth (increases in
national income)

16. Basic macroeconomics concepts:
1. Output and Income
- National output is the lowest amount of everything
a country produces in a given time period. Everything that is
produced and sold generates income. Therefore, output and
income are usually considered equivalent and the two terms
are often used infer changeably.
GDP (Gross Domestic Product) one of the other national
accounts.
2. Unemployment
- The amount of unemployment in an economy is
measured by the unemployment rate, the percentage of
workers without jobs in the Labor Force.

17. 3. Inflation and deflation
- A general price increase across the entire
economy is called Inflation.
When prices decrease, there is Deflation.

18. Importance or uses of Macroeconomics in making
Business Decision
1. To study the economy in totality.
2. To formulate the economic policies of the
government.
3. To develop and expand the microeconomics.
4. To know the situation of the economy.
5. To gain knowledge on sectorial variables.

19. Microeconomics

20. ( from the Greek words mikro means “small” )
A branch of economics that studies
the behavior of individuals and firm
in making decisions regarding the
allocation of limited resources.

21. Importance of Microeconomics
1.To understand the operation of an
economy
2.To provide tools for economic policies
3.To examine the condition of economic
welfare
4.Efficient utilization of resources
5.Useful in international trade
6.Useful in decision making:
Optimal resources allocation
Basis for prediction
Linear programming
Price determinations

22. Example of Microeconomics
 Individual Households
 Business Firms
 Industrial Activities

23. Microeconomics considers four categories:
1. Economic profit – is made when a firm’s average
total costs is less that the price of each addition
product at the profit maximizing output.
2. Normal profit – is one that occurs when a firms
economic profit is zero.
3. Loss Minimizing Conditions – the price is between
the average total cost and average variable cost at
profit maximizing output.
4. Shutdown – the price is below average variable cost
at the profit maximizing output.

24. Division of Economics

25. Production – Manufacturing process of
goods to pride and satisfy the different
needs of consumes. Utilization of products,
good and services by the consumers in a
given amount of time.
Distribution – the way the goods products
and services are delivery to the
consumers, as well as the way the
products goods and services are allocated
to the consumer through the different
economic outlets.

26. Exchange – The way the products
good and services are transferred to
one person to another.
Public Finance – the way the
government implement financial
activities such as on Taxation on
expand tunes and other else