If Joan consumes 1 dinner roll,she has total utility of 15; if she consumes 2,she has total utility of 27; if she consumes 3,she has total utility of 37; and if she consumes 4,she has total utility of 45.What is the marginal utility of the fourth dinner roll consumed?
A) 124 units of utility
B) 45 units of utility
C) 11.25 units of utility
D) 8 units of utility
E) 37 units of utility

Question

Quizplus · Accepted Answer

The formula for calculating marginal utility is the change in total utility divided by the change in the quantity consumed.  
So, for Joan, the marginal utility of the fourth dinner roll consumed would be:
(45 - 37) / (4 - 3) = 8 units of utility.

The best choice for Joan depends on her preferences and budget. If the cost of the fourth dinner roll is less than or equal to the marginal utility she receives from it (in this case, 8 units of utility), it would be rational for her to consume it. However, if the cost is greater than the marginal utility, it would be best for her not to consume it.

If Joan Consumes 1 Dinner Roll,she Has Total Utility of 15;