Final answer:
Mike's marginal utility schedule displays the additional satisfaction he gains from each extra unit of a product, which entails a decreasing amount of satisfaction as more units are consumed.
Step-by-step explanation:
Mike's marginal utility schedule represents the additional satisfaction he receives from each additional unit of the product, which corresponds to option 'a'. This concept in economics suggests that as a consumer continues to consume more units of a good or service, the utility or satisfaction obtained from consuming each additional unit (marginal utility) typically decreases, and this is known as the Law of Diminishing Marginal Utility.
The marginal utility can be understood through an example of consuming movies. When José watches his first movie, he gains a high level of satisfaction. However, the marginal utility of watching additional movies tends to decrease with each successive movie, which means the additional satisfaction from each new movie watched is less than the previous one. Thus, this diminishing additional satisfaction is what marginal utility captures. Over time, the marginal utility may decrease to the point where additional consumption provides no additional satisfaction or even negative satisfaction.
Total utility, on the other hand, is the sum of marginal utilities and represents the total satisfaction that a consumer derives from consuming a certain quantity of goods or services. It increases as more units are consumed, but due to diminishing marginal utility, it does so at a decreasing rate.