The marginal utility associated with eating one sub sandwich is 5 utils. The marginal utility of a second sandwich is 3 utils. In this case total utility _______ with the consumption of the second sandwich.Multiple choice question.increasesdecreasesbecomes zeroremains the same
Question
The marginal utility associated with eating one sub sandwich is 5 utils. The marginal utility of a second sandwich is 3 utils. In this case total utility _______ with the consumption of the second sandwich.Multiple choice question.increasesdecreasesbecomes zeroremains the same
Solution
The total utility increases with the consumption of the second sandwich.
Here's why:
Marginal utility refers to the additional satisfaction a consumer gets from having one more unit of a good or service. The concept of marginal utility is used by economists to determine how much of an item a consumer will buy.
In this case, the marginal utility of the first sandwich is 5 utils and the marginal utility of the second sandwich is 3 utils. This means that the consumer gets less additional satisfaction from the second sandwich compared to the first one. However, the total utility, which is the sum of the marginal utilities, still increases because the marginal utility of the second sandwich is positive (3 utils).
So, even though the marginal utility decreases, the total utility increases.
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