Refer to the accompanying figure to answer the questions.
-Marginal utility is negative:
A) at all levels of consumption.
B) from this consumer's sixth taco on.
C) never.
D) for this consumer's fifth and sixth taco only.
E) when marginal utility is positive.

Question

Refer to the accompanying figure to answer the  questions. 
-Marginal utility is negative:
A) at all levels of consumption. 
B) from this consumer's sixth taco on. 
C) never. 
D) for this consumer's fifth and sixth taco only. 
E) when marginal utility is positive.

Quizplus · Accepted Answer

Marginal utility is negative from the sixth taco onwards because as consumption increases, the satisfaction or utility derived from each additional taco decreases. This is known as the law of diminishing marginal utility.

Refer to the Accompanying Figure to Answer the Questions