Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 6 - Consumer Behavior - Quick Quiz for Figure 6.1 - Page 118: 2

Answer

Option c. rising at a decreasing rate.

Work Step by Step

From figure 6.1a and 6.1b, it is visible that marginal utility is positive, but declining, when total utility is positive at a decreasing rate. This can be easily understood with a simple example. Suppose that you are having some tacos. When you have the 1st taco, you may get say 10 unit of satisfaction. Now, when you have the 2nd taco, you will not get again 10 unit of satisfaction as you have already had one. So you will get some unit of positive satisfaction, say 8, which is lesser than 10 units. In the above example, the marginal utility stayed positive but decreased from 10 to 8. At the same time, total utility jumped from 0 to 10 and then 10 to 18, with decreasing rate from 10 to 8.
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