Lesson: Consumption Choices

Work It Out: Calculating Total Utility

Work It Out: Calculating Total Utility

Point T-Shirts Movies Total Utility
P 4 0 81 + 0 = 81
Q 3 2 63 + 31 = 94
R 2 4 43 + 58 = 101
S 1 6 22 + 81 = 103
T 0 8 0 + 100 = 100


Let’s look at how José makes his decision in more detail.

Step 1: Observe that, at point Q (for example), José consumes three T-shirts and two movies. 

Step 2: Look at the table below. You can see from the fourth row/second column that three T-shirts are worth 63 utils. Similarly, the second row/fifth column shows that two movies are worth 31 utils. 

T-Shirts (Quantity) Total Utility Marginal Utility Movies (Quantity) Total Utility Marginal Utility
1 22 22 1 16 16
2 43 21 2 31 15
3 63 20 3 45 14
4 81 18 4 58 13
5 97 16 5 70 12
6 111 14 6 81 11
7 123 12 7 91 10
8 133 10 8 100 9


Step 3: From this information, you can calculate that point Q has a total utility of 94 (63 + 31).

Step 4: You can repeat the same calculations for each point on the first table, in which the total utility numbers are shown in the last column. 

For José, the highest total utility for all possible combinations of goods occurs at point S, with a total utility of 103 from consuming one T-shirt and six movies.