200

160

120

80

40

0

1100

1040

900

680

380

0

1100

1120

1050

890

640

300

Adding up total utility for round trips and phone minutes at different points on the budget line gives total

utility at each point on the budget line. The highest possible utility is at the combination of one trip and

160 minutes of phone time, with a total utility of 1120.

2. The first step is to use the total utility figures, shown in the table below, to calculate marginal utility,

remembering that marginal utility is equal to the change in total utility divided by the change in trips or

minutes.

Round

Trips

Total

Utility

Marginal Utility (per

trip)

Phone

Minutes

Total

Utility

Marginal Utility (per

minute)

0

1

0

80

-

80

200

160

1100

-

1040

60/40 = 1.5
546

Round

Trips

Total

Utility

Marginal Utility (per

trip)

Phone

Minutes

Total

Utility

Marginal Utility (per

minute)

2

3

4

5

150

210

260

300

70

60

50

40

120

80

40

0

900

680

380

0
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