If I get 10 units of total utility (TU)from 2 oranges, 14 of TU from 3 oranges, and 17 of TU from 4 oranges, I obey the law of diminishing marginal utility because:
A)MU falls as consumption increases.
B)TU increases as consumption increases.
C)TU MU.
D)MU TU.
E)MU = TU.

Question

If I get 10 units of total utility (TU)from 2 oranges, 14 of TU from 3 oranges, and 17 of TU from 4 oranges, I obey the law of diminishing marginal utility because:
A)MU falls as consumption increases.
B)TU increases as consumption increases.
C)TU > MU.
D)MU > TU.
E)MU = TU.

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as an individual consumes more and more units of a good, the additional satisfaction or utility received from each additional unit of the good decreases. In this case, the total utility increases as the number of oranges consumed increases from 2 to 3 to 4, but the marginal utility (the additional utility received from each additional orange) decreases, as shown by the smaller increases in TU (4 units from 2 to 3 oranges, and 3 units from 3 to 4 oranges). This is consistent with choice A, which states that MU falls as consumption increases.

If I Get 10 Units of Total Utility (TU)from 2