Question

Where total utility is increasing, marginal utility is

a) positive
b) can't determine
c) negative
d) zero

Answer 1

When total utility is increasing, marginal utility is a) positive. Hence, a) is correct.

Step-by-step explanation:

Marginal utility is positive when total utility is increasing. This means that each additional unit of a good or service consumed adds more satisfaction or utility to the consumer. As long as each additional unit provides more utility, the marginal utility will be positive.

For example, if a person eats a slice of pizza and finds it delicious, the utility of the first slice is positive. If they eat another slice and still find it enjoyable, the utility of the second slice is also positive. However, as the consumption continues, the marginal utility tends to diminish.