Exhibit 6-18

-When moving from point c to point a in Exhibit 6-18.The value of total utility is:
A) Increasing from $13 to $$22
B) Increasing from $22 to 25
C) Decreasing from $6 to $3
D) Decreasing from $25 to $13
E) Decreasing from $22 to $6

Question

Exhibit 6-18
 
-When moving from point c to point a in Exhibit 6-18.The value of total utility is:
A) Increasing from $13 to $$22 
B) Increasing from $22 to 25 
C) Decreasing from $6 to $3 
D) Decreasing from $25 to $13 
E) Decreasing from $22 to $6

Quizplus · Accepted Answer

Moving from point c to point a involves a decrease in the quantity of the good consumed (from 5 to 3) and a decrease in total utility (from $25 to $13) since the marginal utility of the good is diminishing. Therefore, the best choice is to stay at point c or move to a point with a higher total utility.

Exhibit 6-18 -When Moving from Point C to Point

Exhibit 6-18

-When Moving from Point C to Point