The amount by which total utility rises when an additional slice of pie is consumed is called:

A) average utility.
B) the law of diminishing returns.
C) incremental utility.
D) marginal utility.

The term used to describe the amount by which total utility rises when an additional unit is consumed is marginal utility. Choice A, average utility, is the total utility divided by the quantity consumed, and represents the average amount of satisfaction derived from each unit. The law of diminishing returns, choice B, states that as more and more units of a variable input (such as labor) are added to a fixed input (such as machinery), the marginal product of the variable input will eventually decrease. Choice C, incremental utility, is not a commonly used term in economics.