Given that utility is the level of satisfaction a consumer drives from consuming a commodity, and assuming that economic agents are rational and prefer more to less. Explain what might be observed about the total utility and marginal utility of Kante wh

When Kante visits a coffee shop and consumes four cups of black coffee, we can examine how his total utility and marginal utility changes with each additional cup. 1. **Total Utility**: Total utility refers to the overall satisfaction or benefit Kante derives from all the cups of coffee he consumes. As he consumes more cups, his total utility generally increases, as each cup provides him with a certain level of satisfaction. 2. **Marginal Utility**: Marginal utility refers to the additional satisfaction gained from consuming one more unit of a good (in this case, one more cup of coffee). For Kante, the marginal utility tends to be high for the first cup since he may be feeling tired or craving coffee. As he consumes additional cups, the increment of satisfaction from the additional cups generally diminishes. ### Relationship to Diminishing Marginal Utility The concept of diminishing marginal utility states that as a person consumes more units of the same good, the additional satisfaction from each subsequent unit will eventually decrease. In Kante’s case: - **First Cup**: Provides the highest marginal utility (especially if he was tired or craving coffee). - **Second Cup**: Still provides a positive marginal utility, but less than the first. - **Third Cup**: Marginal utility continues to decline as he becomes more satiated. - **Fourth Cup**: The marginal utility may be very low, and he might even feel full or averse to more coffee. In this scenario, Kante’s total utility continues to rise with the consumption of each cup; however, the rate of increase becomes less pronounced with each additional cup due to the law of diminishing marginal utility. ### Implications for Pricing Because the marginal utility decreases with each additional cup consumed, Kante is likely to value each subsequent cup less than the previous one. This is why consumers generally pay less for additional units of a commodity. - **Willingness to Pay**: The decreasing marginal utility means that Kante is only willing to pay a high price for the first cup, a slightly lower price for the second, and so on. By the time he reaches the fourth cup, his willingness to pay may significantly drop. Ultimately, the law of diminishing marginal utility explains why Kante may enjoy drinking coffee initially but then finds each additional cup less satisfying, leading him to be less willing to pay full price for every杯 of coffee. This illustrates a fundamental concept in economics that affects how prices are determined and how consumers make choices based on perceived value.