Answer to Question #268929 in Microeconomics for Rimi

Question

The below table contains the information about the total utility a consumer gets from consuming water.

 

Chocolate

1

2

3

4

5

Total Utility

30

55

65

65

30

 

Find marginal utility.

Plot total utility and marginal utility curve by using above information.

Explain the relationship between the total utility and marginal utility.

Answer 1

(a)

(b)

(c)

It is noted that for a single item, total utility is maximized when marginal utility is equal to zero. The total utility declines when marginal utility is negative.