Note: This is post #69 in a weekly video series on basic microeconomics.

When we buy a good or make a decision about how to use our time, we do so because we believe we are getting some sort of value from our choice, such as a sense of happiness or satisfaction. Economists call this “utility.” In this video by Marginal Revolution University, Joana Girante discusses the increase in the value from buying an additional unit of a good or service is its marginal utility, and how when you make these decisions, we’re thinking at the margin, even if we don’t realize it.

(If you find the pace of the videos too slow, I’d mend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Click here to see other videos in the Introduction to Economics series.