Asked by Savannah Pless on May 08, 2024
Verified
Refer to Figure 6.12. If Arthur moves from indifference curve 2 to indifference curve 1, then Arthurʹs
A) marginal utility decreases.
B) total utility decreases.
C) total income increases.
D) prices of the goods decrease.
Marginal Utility
The additional satisfaction or benefit (utility) that a consumer derives from buying an additional unit of a commodity or service.
Total Utility
The complete satisfaction or pleasure a consumer obtains from consuming a given quantity of goods or services.
- Familiarize oneself with the concept of indifference curves and their utilization in the analysis of consumer preferences and decision-making strategies.
Verified Answer
TF
Teresa FernandezMay 15, 2024
Final Answer :
B
Explanation :
Moving to a lower indifference curve (from 2 to 1) indicates a decrease in total utility, as each curve represents a level of satisfaction, with higher curves indicating higher satisfaction or utility.
Learning Objectives
- Familiarize oneself with the concept of indifference curves and their utilization in the analysis of consumer preferences and decision-making strategies.
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