Total Utility and Marginal Utility Quiz

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Questions and Answers

True or false: Total utility (TU) increases as long as marginal utility (MU) is positive?

True (A)

True or false: Total utility (TU) is maximum when marginal utility (MU) is negative?

False (B)

True or false: Total utility (TU) starts diminishing when marginal utility (MU) is negative?

True (A)

True or false: Decreasing marginal utility (MU) implies that total utility (TU) is increasing at a decreasing rate?

<p>True (A)</p> Signup and view all the answers

True or false: When total utility (TU) is maximum, marginal utility (MU) reaches zero?

<p>True (A)</p> Signup and view all the answers

Flashcards

Total Utility (TU) and Marginal Utility (MU)

Total utility is the overall satisfaction from consuming a particular number of items. Marginal utility is the additional satisfaction from consuming one more item.

MU positive, TU increasing?

If marginal utility (MU) is positive, total utility (TU) increases.

MU negative, TU outcome?

When marginal utility is negative, total utility starts to decrease.

Decreasing MU, TU trend?

As marginal utility decreases, total utility still increases, but at a slower rate.

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Maximum TU, MU's value?

When total utility is at its maximum, marginal utility is zero.

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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.

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Description

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.