Suppose that U = U(P, M), where P and M are peanuts and marshmallows. The marginal utility of marshmallows, MU_M, is given by: A) P + M. B) P/M. C) ΔU(P, M)/ΔM. D) ΔU(P, M) × ΔM.

Question

Quizplus · Accepted Answer

The marginal utility of marshmallows is defined as the change in utility from consuming an additional unit of marshmallows, holding everything else constant. This is mathematically represented as the partial derivative of the utility function with respect to marshmallows, M, which is correctly expressed as ΔU(P, M)/ΔM.

Suppose That U = U(P, M), Where P and M