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Economics miscellaneous

  1. When marginal utility is zero, the total utility is
    1. Minimum
    2. Increasing
    3. Maximum
    4. Decreasing
Correct Option: C

Marginal utility measures the extra utility (or satisfaction) from consuming an additional unit of a product. Total utility is the total satisfaction from the consumption of the product. According to the Law of Diminishing Marginal Utility, total utility increases at a diminishing rate. When marginal utility is 0 this means there is no increase in total satisfaction from the consumption of that unit. So the total unit is at maximum.



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