Which of the following statements is false?
A)If marginal utility is diminishing, then total utility is increasing but at a decreasing rate.
B)If marginal utility is diminishing, then total utility is concave.
C)If marginal utility is negative, then total utility is downward-sloping.
D)If marginal utility is decreasing, then total utility is decreasing.

Question

Quizplus · Accepted Answer

If marginal utility is decreasing, it means that additional units of the good or service are providing less and less utility, but it does not necessarily mean that total utility is decreasing. Total utility can still be increasing, but at a decreasing rate. If marginal utility is decreasing, it means that the additional satisfaction received from consuming an additional unit of a good is becoming smaller. However, it does not necessarily mean that total utility is decreasing. Total utility may still be increasing, but at a decreasing rate (as in statement A), or it may be constant (if marginal utility is equal to zero) or even decreasing if marginal utility becomes negative (as in statement C). Therefore, statement D is false.

Which of the Following Statements Is False