Question

How does the concept of “more is preferred to less” impact the TU and MU curves?

Answer 1

Marginal utility is defined as the extra utility derived from consumption of one more unit of a good ( keeping consumption of other good constant ) . We know that while drawing indifference curves we assume there is diminishing marginal utility . The total utility also increases as more and more goods are consumed .

The total utility curve first rises upwards and then slopes down . The maximum point on the TU curve is when MU is zero . This is the saturation point . "More is preferred to less " this means that all goods are highly desirable and the consumer always prefers to have more of a good . This makes the marginal utility curves downward sloping . If they were upward sloping, horizontal, or strictly vertical they would violate the condition of more is preferred to less .