Asked by robin singh on Jul 16, 2024
Verified
Which of the following is correct?
A) There is no firm mathematical relationship between marginal utility and total utility.
B) Total utility is equal to the change in marginal utility from consuming an additional unit of a product.
C) If marginal utility is diminishing and is a positive amount, total utility will increase.
D) If marginal utility is diminishing, total utility must also be diminishing.
Marginal Utility
The extra pleasure or benefit gained from the consumption of an additional unit of a product or service.
Total Utility
The overall satisfaction or benefit received by consuming a particular quantity of goods or services.
- Become conversant with the relationship between total utility and marginal utility.
Verified Answer
JC
Jolynn CosbyJul 19, 2024
Final Answer :
C
Explanation :
C is correct because when marginal utility is positive, it means that each additional unit consumed adds to the total utility, albeit at a decreasing rate. This is the principle of diminishing marginal utility, which states that as consumption increases, the marginal utility derived from each additional unit decreases, but total utility still increases as long as marginal utility is positive.
Learning Objectives
- Become conversant with the relationship between total utility and marginal utility.