Au Gratin Potatoes

2 lbs potatoes (about 6 medium)
1 medium onion, chopped (about 1/2 cup)
1/4 c margarine or butter
1 T flour
1 t salt
1/4 t pepper
2 c milk
2 c shredded natural sharp Cheddar cheese (about 8 oz)
1/4 c fine dry bread crumbs
Paprika

Peel and dice potatoes. Cook and stir onion in margarine in 2-quart saucepan until onion is tender. Stir in flour, salt, and pepper. Cook over low heat, stirring constantly, until mixture is bubbly; remove from heat. Stir in milk and 1 1/2 cups of cheese. Heat to boiling, stirring constantly. Boil and stir 1 minute. Place potatoes in ungreased 1 1/2 quart casserole dish. Pour cheese sauce over potatoes. Cook uncovered in 325 oven 1 hour 20 minutes or in 375 degree oven for 1 hour.

Mix remaining cheese and the bread crumbs; sprinkle over potatoes. Sprinkle with paprika. Cook uncovered until top is brown and bubbly, 15 to 20 minutes longer.