The marginal utility of a unit of good X
A)is always greater than the total utility of X.
B)is always less than the average utility of X.
C)generally depends on how much X the consumer already has.
D)is always equal to the price of X.

Question

Quizplus · Accepted Answer

The marginal utility of a unit of good X generally depends on how much X the consumer already has. As the consumer buys and consumes more X, the marginal utility of additional units of X tends to decrease. Therefore, the marginal utility of X varies with the amount of X that has already been consumed. Option A is incorrect because it is not necessarily true that the marginal utility of a unit of good X will always be greater than the total utility of X. Option B is incorrect because there is no direct relationship between marginal and average utility. Option D is incorrect because the marginal utility of X and the price of X are not necessarily equal.

The Marginal Utility of a Unit of Good X