Question

Indicate whether the following statements are True or False

a)Total utility is the benefit received from consuming an extra unit of a good
b)According to the principle of diminishing marginal utility, as an individual consumes more and more of a good or service ,the total utility increases while the marginal utility decreases
c)Tom's marginal utility from a Sobe exceeds his marginal utility of crackers.Therefore , his total utility of Sobe must exceed his total utility of crackers
d)Marginal utility diminishes as consumption of a good decreases

Answer 1

a)Total utility is the benefit received from consuming an extra unit of a good

• False

• Marginal unit is the benefit received from consuming an extra unit of a good.

b)According to the principle of diminishing marginal utility, as an individual consumes more and more of a good or service ,the total utility increases while the marginal utility decreases

• True

c) Tom's marginal utility from a Sobe exceeds his marginal utility of crackers.Therefore , his total utility of Sobe must exceed his total utility of crackers

• True

d)Marginal utility diminishes as consumption of a good decreases

• True