Table 6.2
$$\begin{array} { | c | c | }
\hline \text { Units Consumed } & \text { Total Utility } \
\hline 0 & 0 \
\hline 1 & 30 \
\hline 2 & 65 \
\hline 3 & 85 \
\hline 4 & 89 \
\hline 5 & 88 \
\hline
\end{array}$$
-Refer to Table 6.2,which shows the total utility derived from the consumption of a good.The first column of the table shows the number of units of the good consumed in a day,and the second column of the table shows the total utility derived from that consumption.Marginal utility is maximized after the consumption of how many units?
A)0
B)1
C)2
D)3
E)5

Question

Table 6.2
 $$\begin{array} { | c | c | } 
\hline \text { Units Consumed } & \text { Total Utility } \
\hline 0 & 0 \
\hline 1 & 30 \
\hline 2 & 65 \
\hline 3 & 85 \
\hline 4 & 89 \
\hline 5 & 88 \
\hline
\end{array}$$
-Refer to Table 6.2,which shows the total utility derived from the consumption of a good.The first column of the table shows the number of units of the good consumed in a day,and the second column of the table shows the total utility derived from that consumption.Marginal utility is maximized after the consumption of how many units?
A)0
B)1
C)2
D)3
E)5

Quizplus · Accepted Answer

Marginal utility is the additional utility derived from consuming an additional unit of a good. To determine the point of maximum marginal utility, we need to calculate the marginal utility for each unit of consumption. The marginal utility for each unit of consumption can be calculated by taking the difference in total utility between the current level of consumption and the previous level of consumption. For example, the marginal utility of consuming the first unit is 30 - 0 = 30. The marginal utility of consuming the second unit is 65 - 30 = 35.

As we move from the first to the fifth unit of consumption, the marginal utility initially increases, but then begins to decrease. The marginal utility of the third unit (85 - 65 = 20) is less than the marginal utility of the second unit (35), and the marginal utility of the fourth unit (89 - 85 = 4) is less than the marginal utility of the third unit (20). Therefore, the point of maximum marginal utility is after the consumption of the second unit, and the best choice would be to consume two units of the good.

Table 62 -Refer to Table 6