Question

the total utilities associated with the first 5 units of consumption of good x are 15, 30, 40, 47, and 50, respectively. what is the marginal utility associated with the third unit? group of answer choices 15. 70. 85. 10. 45.

Answer 1

According to the given information, The marginal utility associated with the third unit (MU3) is 10.

Marginal utility (MU) attained at the third unit of good is calculated as,

MU3 = TU3 - TU2

MU3 = 40 - 30

MU3 = 10 utils

Where MU and TU reflect the extents of marginal and total utility.

• A consumer's increased enjoyment from owning one extra unit of a good or service is known as marginal utility.
• Economists use the idea of marginal utility to estimate how much of a given good consumers are willing to buy.
• The theory of diminishing marginal utility is frequently invoked to support progressive taxation.
• It is possible for marginal utility to be positive, zero, or negative.
• The concept of marginal utility is helpful in describing how customers make decisions to maximize the value from their finite resources.
• In order to maximize the value of their tight budgets, consumers make decisions. As long as the marginal utility exceeds the marginal cost, individuals will often continue to consume more of a good.
• Price and marginal cost are equal in a market that is efficient.

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