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Chapter 6: Q. 6 (page 151)

Would you expect the total utility to rise or fall with additional consumption of a good? Why?

Short Answer

Expert verified

Yes, total utility rises till the point where the marginal utility is positive.

Step by step solution

01

Step 1:Definition

Total Utility and Marginal Utility:

In economics, total utility and marginal utility are concepts under utility that assist determine a consumer's level of satisfaction. The total utility refers to the whole amount of pleasure derived by a customer from the consumption of a specific amount of products. Marginal utility, on the other hand, refers to the additional utility gained by a consumer from the consumption of one additional unit of the good.

02

Step 2:Explanation

In general, better total utility is associated with more consumption of a good. The additional utility gained from each unit of higher consumption, on the other hand, tends to reduce in a diminishing marginal utility pattern. The amount of utility derived from eating goods is determined by the individual's preferences.

03

Step 3:Conclusion

Therefore, the amount at which marginal utility drops determines whether overall utility rises or falls with further consumption of a good.

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Most popular questions from this chapter

The rules of politics are not always the same as the rules of economics. In discussions of setting budgets for government agencies, there is a strategy called 鈥渃losing the Washington Monument.鈥� When an agency faces the unwelcome prospect of a budget cut, it may decide to close a high-visibility attraction enjoyed by many people (like the Washington Monument). Explain in terms of diminishing marginal utility why the Washington Monument strategy is so misleading. Hint: If you are really trying to make the best of a budget cut, should you cut the items in your budget with the highest marginal utility or the lowest marginal utility? Does the Washington Monument strategy cut the items with the highest marginal utility or the lowest marginal utility?

Is it possible for the total utility to increase while marginal utility diminishes? Explain.

Draw a consumer鈥檚 indifference curves for wine and cheese. Describe and explain four properties of these indifference curves.

Question:At any point on an indifference curve, the slope of curve measures the consumer鈥檚

a. income

b. willingness to trade one good for the other

c. perception of two goods as substitutes or complements.

d. elasticity of demand

Mr. Burns buys only lobster and chicken. Lobster is a normal good, while chicken is an inferior good. When the price of lobster rises, Mr. Burns buys

  1. less of both goods.

  2. more of lobster and less chicken.

  3. less lobster and more chicken.

  4. less lobster, but the impact on chicken in ambiguous.
See all solutions

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