Question

What is the definition of marginal​ utility? A. The average utility from consuming a good or service multiplied by the number of units of that good or service consumed. B. The utility from consuming a good or service divided by the number of units of that good or service consumed. C. The change in utility from consuming an additional unit of a good or service. D. Utility measured in utils. E. The enjoyment or satisfaction people receive from consuming goods and services.

The law of diminishing marginal utility suggests that A. consumers experience less total satisfaction from inferior goods than from normal goods. B. consumers experience diminishing additional satisfaction from a good or service over time. C. consumers experience less total satisfaction as they consume more of a good or service. D. consumers experience less total satisfaction on lower budget constraints. E. consumers experience diminishing additional satisfaction as they consume more of a good or service.

Marginal utility is more useful than total utility in consumer decision making because A. optimal decisions are made by consuming until marginal utility becomes negative. B. consumers maximize utility by equalizing marginal utility from each good. C. optimal decisions are made at the margin. D. consumers maximize utility by maximizing marginal utility from each good. E. it is possible to measure marginal utility but not total utility.

Answer 1

1 - Option C

Change in Utility from consumption of one more unit of good or service

This is the correct definition of marginal utility.

2 - Option E

Consumers experience diminishing satisfaction as they consume additional unit of a good or service.

This is called the law of diminshing returns

3 - Option A

Optimal decisions are made until the marginal utility becomes negative.

The total utility never becomes negative. Hence the correct decisions are made with marginal utility and not total utility