Question

14. According to economic theory, what is the effect on total utility and marginal utility when you eat more and more oranges?

a. Your total utility falls, but the marginal utility of each orange rises.

b. Your marginal utility rises as long as the total utility derived from the oranges remains positive.

c. Your total utility rises, as does the marginal utility of each orange.

d. Your total utility rises as long as the marginal utility of the oranges is positive, but the marginal utility of each additional orange likely falls.

Answer 1

14. Ans: d) Your total utility rises as long as the marginal utility of the oranges is positive, but the marginal utility of each additional orange likely falls.

Explanation:

Marginal utility refers to the addition made to the total utility from an additional unit or one more unit of consumption of a good. Total utility rises as long as the marginal utility of the oranges is positive. Total utility starts to decline when marginal utility of the good becomes negative.