Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P x . Assume that P = $8, I = 200, and P x = $10.
-Marginal utility is _____.
A)always greater than total utility
B)utility that is not as good as normal utility
C)the extra utility derived from consuming one additional unit of a good or service
D)always positive
E)not related to total utility

Question

Quizplus · Accepted Answer

Marginal utility refers to the extra utility gained from consuming one additional unit of a good or service. It is not always greater than total utility, but it is always positive since consuming an additional unit of a good or service always adds some level of satisfaction or usefulness. Therefore, the correct answer is (C).

Scenario 5.1 The Demand for Noodles Is Given by the Following Equation