. What is meant by marginal utility of money
- Marginal utility of money means the worth of a rupee or, say, the value of a rupee.
- It is defined as the utility he derives from the purchase of a basket of goods he can buy with a rupee.
- For example, if a rupee can buy 100gm sugar, 200gm rice, 300gm wheat with a rupee, and the utility received from all
these goods are 4 utils, then the marginal utility of money is taken as 4.
In simple words, the marginal utility of money is the utility a consumer receives from the consumption of a good when he spends a rupee on it.