Refer to Table 5.13 to answer this question.With the consumption of what quantity is marginal utility equal to zero.
A)1.
B)5.
C)7.
D)8.

Question

Quizplus · Accepted Answer

Marginal utility is equal to zero when the total utility stops increasing, meaning that the consumption of the last unit did not provide any additional satisfaction. In this case, we can see from Table 5.13 that the marginal utility starts to decrease after 7 units of consumption, and becomes zero when consuming the 8th unit. Therefore, the best choice is to consume 7 units.