Question

A. Define marginal utility, total utility, and the law of diminishing marginal utility. B. In a...

A. Define marginal utility, total utility, and the law of diminishing marginal utility.

B. In a well-labeled graph, demonstrate the relation between marginal utility and total utility.

C. What is relation between marginal utility and total utility when the consumer’s total utility is maximized?

D. What happens to total utility if a consumer continues to consume a good or services with negative marginal utility?

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Answer #1

A.
Marginal Utility: It is the additional satisfaction derived by consuming an additional unit
Total utility: It is the total satisfaction derived by consuming a given total quantity of good
Law of diminishing marginal utility: With the increase in consumption of good, the marginal utility starts to decrease by consuming each additional unit.

B.

C. Marginal utility will be zero when total utility is maximum

D. The total utility derived starts to decrease, when a consumer continues to consume a good or services with negative marginal utility

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