The table given below depicts the total utility derived from the consumption of a good.Table 7.1

-If total utility increases by smaller and smaller amounts as more units of a product are consumed, then marginal utility is:
A)decreasing and is a negative amount.
B)decreasing and is a positive amount.
C)zero.
D)increasing and is a negative amount.
E)increasing and is a positive amount.

Question

The table given below depicts the total utility derived from the consumption of a good.Table 7.1
 
-If total utility increases by smaller and smaller amounts as more units of a product are consumed, then marginal utility is:
A)decreasing and is a negative amount. 
B)decreasing and is a positive amount. 
C)zero. 
D)increasing and is a negative amount. 
E)increasing and is a positive amount.

Quizplus · Accepted Answer

When the total utility increases by smaller and smaller amounts as more units of a product are consumed, this indicates that the marginal utility is decreasing. Since marginal utility measures the change in total utility that comes from consuming one additional unit of a good, a decreasing marginal utility means that each additional unit is providing less and less additional utility. However, marginal utility is still a positive amount because it represents the additional utility gained from consuming an additional unit, even if that gain is decreasing. Therefore, the correct answer is B - decreasing and positive.

The Table Given Below Depicts the Total Utility Derived from the Consumption