Asked by James McGee on Jun 13, 2024
Verified
If total utility is increasing, then marginal utility
A) must be declining.
B) must be increasing.
C) must be increasing at an increasing rate.
D) may either be increasing or decreasing, but it must be greater than zero.
Marginal Utility
The increased happiness or advantage derived from the consumption of one extra piece of a good or service.
Total Utility
The full pleasure gained by using a particular volume of goods or services.
- Learn and apply the theory of marginal utility.
Verified Answer
AH
Armando HernandezJun 13, 2024
Final Answer :
D
Explanation :
When total utility is increasing, it means that the addition of more units of a good or service is still providing positive utility, hence the marginal utility must be greater than zero. However, it does not specify whether the rate of increase in marginal utility is increasing, decreasing, or constant, only that it is positive.
Learning Objectives
- Learn and apply the theory of marginal utility.
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