Marginal utility

Total utility increases as long as

• marginal utility increases

• marginal utility decreases

• marginal utility is positive

• marginal utility is negative

Marginal utility refers to

• the additional product produced as the firm adds one additional unit of an input

• the additional utility that a consumer derives from consuming one additional unit of a good

• the amount of utility divided by the number of units produced

• all of the above

Consumers will maximize satisfaction when

• the price of each good is exactly equal to the price of every other good consumed

• the price of each good is exactly equal to the total utility derived from the consumption of every other good

• the marginal utility of the last dollar spent on each good is exactly equal to the marginal utility of the last dollar spent on any other good

• marginal utility is equal to average utility

Which of the following is true if consuming one unit of good yields 100 utils and consuming the second unit of the good increases satisfaction by 20 utils?

• The marginal utility of the first unit is 20

• The marginal utility of the second unit is 80

• The marginal utility of the second unit is 120

• The total utility of consuming two units is 120

Which of the following best expresses the law of diminishing marginal utility?

• the more a person consumes of a product, the smaller becomes the total utility that he receives from its consumption

• the more a person consumes of a product, the smaller becomes the additional utility that he receives from consuming each additional unit

• the less a person consumes of a product, the smaller becomes the total utility that he receives from its consumption

• the less a person consumes of a product, the smaller becomes the additional utility that he receives from consuming each additional unit

Total Utility will be greatest when marginal utility equals

• 0

• 1

• 2

• 3

Total Utility will fall if marginal utility is ?

• equal

• negative

• positive

• decreassing

If Ann gets 100 units of utility from reading a book and 500 units of utility from playing with her cat, we know that Ann

• does not enjoy reading books
• does not enjoy playing with her cat
• prefers reading a book to playing with her cat
• prefers playing with her cat to reading a book

As more of a good is consumed, total utility

• increases
• decreases
• remains the same
• becomes negative and then turns positive

As more of a good is consumed, marginal utility

• increases

• decreases

• remains the same

• becomes negative and then turns positive