Question

The typical pattern revealed in a budget constraint model shows that as the quantity consumed rises, A. total utility rises, but marginal utility falls. B. marginal utility increases. C. total utility decreases, but marginal utility rises. D. total utility decreases.

Answer 1

Answer: A, Total utility rises but marginal utility falls.

Explanation: Utility is the satisfaction derived when a product or service is consumed. Marginal utility is the satisfaction derived when additional product is consumed.

Often, as a product is being consumed, the total utility increases while the marginal utility decreases.