If the utility function (U)between food (F)and clothing (C)can be represented as U = ,the marginal utility of food
A) is not positive.
B) does not diminish as food increases.
C) is not affected by the amount clothing.
D) increases as one obtains more clothing.

Question

If the utility function (U)between food (F)and clothing (C)can be represented as U =  ,the marginal utility of food
A) is not positive. 
B) does not diminish as food increases. 
C) is not affected by the amount clothing. 
D) increases as one obtains more clothing.

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, as one consumes more of a good, the marginal utility derived from consuming an additional unit decreases. However, in this utility function, the exponent on the amount of food (e^F) is positive, indicating that the marginal utility of food is increasing as one obtains more food. This means that choice D is the best answer.

If the Utility Function (U)between Food (F)and Clothing (C)can Be