Total Utility

Total utility is the sum of all marginal utility you get from a thing. (See: Marginal Utility.)

Every time you get home, your dog greets you, and you both have a nice little moment. Each of those moments comprise marginal utility—a small piece of total utility. The total utility of happiness you get from your dog is all of those moments added up over your entire relationship with Fido.

Food is another example: each bite of food has marginal utility. All of those bites add up to create your total utility. Since your first bite of pizza is probably more enjoyable than your last bite of pizza, your first unit of marginal utility of that pizza is no doubt much higher than your last bite. Diminishing marginal utility.

Since marginal utility often diminishes with consumption, total utility isn’t as easy as 5 bites of pizza x 1 util = 5. It’s more complicated than that, which is why we need to understand marginal utility to get an accurate picture of what our total utility is for a good or service. And total utility, compared to total costs, is how we decide if something is worth it or not.

Dogs...definitely worth it. Pineapple pizza? Eh...maybe not.