What does the term 'marginal utility' mean?

The term 'marginal utility' refers specifically to the benefit or satisfaction obtained from consuming one additional unit of a good or service. This concept is a fundamental principle in economics that helps explain consumer behavior and decision-making. When a consumer is faced with the choice of whether to purchase an extra unit of a good, they consider the marginal utility, which can fluctuate based on various factors such as individual preferences and the amount of the good already consumed.

This principle also helps in understanding the law of diminishing marginal utility, where the additional satisfaction gained from each subsequent unit consumed tends to decrease. For example, the first slice of pizza might bring a significant amount of satisfaction, but by the fourth or fifth slice, the additional pleasure derived from each slice may diminish. In this way, marginal utility is crucial for analyzing how consumers allocate their resources and make choices.

The other options represent different concepts in economics. Total satisfaction relates to overall utility, while satisfaction from alternative goods and loss of satisfaction from non-consumption address different aspects of consumer choice and opportunity costs.