5 Questions
True or false: Total utility (TU) increases as long as marginal utility (MU) is positive?
True
True or false: Total utility (TU) is maximum when marginal utility (MU) is negative?
False
True or false: Total utility (TU) starts diminishing when marginal utility (MU) is negative?
True
True or false: Decreasing marginal utility (MU) implies that total utility (TU) is increasing at a decreasing rate?
True
True or false: When total utility (TU) is maximum, marginal utility (MU) reaches zero?
True
Study Notes
Relationship between Total Utility and Marginal Utility
- Total utility (TU) increases as long as marginal utility (MU) is positive.
- Total utility (TU) is maximum when marginal utility (MU) reaches zero, not when MU is negative.
- Total utility (TU) does not start diminishing when marginal utility (MU) is negative; instead, it starts diminishing when MU becomes zero.
- Decreasing marginal utility (MU) implies that total utility (TU) is increasing at a decreasing rate.
Test your knowledge on the relationship between Total Utility (TU) and Marginal Utility (MU) with this quiz. Explore how TU increases, reaches a maximum, and starts diminishing as MU changes.
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