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.

Question

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.

Simya DezMonique · Accepted Answer

Final Answer : C, Explanation :  If marginal utility is diminishing but still positive, it means that each additional unit consumed provides less additional satisfaction than the previous unit consumed. However, the total amount of satisfaction or utility obtained from consuming all units up to that point still increases as long as the marginal utility is positive. Therefore, choice C is correct. Option A is incorrect because there is a relationship between marginal and total utility - as more units are consumed, total utility increases but at a decreasing rate due to diminishing marginal utility. Option B is incorrect because total utility is the total amount of satisfaction obtained from consuming a certain quantity of a good, regardless of the change in marginal utility from consuming an additional unit. Option D is incorrect because as stated earlier, total utility can still increase even if marginal utility is diminishing as long as it is still positive.

Definitions

Learning Objectives

Learning Objectives

Related questions