1
$\begingroup$

I'm just getting started as an amateur into microeconomics and I really can't understand this thing about marginal utility when more than one good is involved:

Let's say I have the utility function U = x(y+1).

Now, from what I've studied, I think that the marginal utilities for x and y should be:

MUx = y+1
MUy = x

I just don't get how to arrive there "mathematically", and I fear I wouldn't be able to find the marginal utilities of a more complex function, for example U = x(x+y)

Could you help me?
Thank you!

$\endgroup$
5
  • 2
    $\begingroup$ Have you studied differential calculus? $\endgroup$
    – Dan
    Dec 2, 2018 at 13:19
  • $\begingroup$ I know how to find the derivative of a single-variable function, but I've never done it with two variables $\endgroup$
    – alkazam
    Dec 2, 2018 at 13:26
  • $\begingroup$ It's basically the same, but called a partial derivative. The marginal utility of $x$ is just $dU/dx$, treating $y$ as if it's a constant. This is exactly what you've already done for your first utility function. $\endgroup$
    – Dan
    Dec 2, 2018 at 17:19
  • $\begingroup$ Take a look at partial derivative. $\endgroup$
    – Herr K.
    Dec 2, 2018 at 20:55
  • $\begingroup$ It was quite easy then. Thank you very much! $\endgroup$
    – alkazam
    Dec 2, 2018 at 21:14

1 Answer 1

1
$\begingroup$

This is quite simple to answer given you know a bit of multivariable differential calculus. You're looking for partial derivatives of the utility function.

So, given $$U(x,y) = x(y+1)$$ we have $$\frac{\partial U}{\partial x} = y+1$$ and $$\frac{\partial U}{\partial y} = x$$.

These are the goods' marginal utilities.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.