[amp_mcq option1=”MU is zero” option2=”AU is the highest” option3=”MU is the highest” option4=”MU is equal to AU” correct=”option4″]<\/p>\n
The correct answer is: D. MU is equal to AU.<\/p>\n
Total utility (TU) is the total satisfaction or benefit that a consumer receives from consuming a good or service. Marginal utility (MU) is the additional satisfaction or benefit that a consumer receives from consuming one more unit of a good or service.<\/p>\n
The law of diminishing marginal utility states that as a consumer consumes more of a good or service, the marginal utility of that good or service decreases. This means that each additional unit of the good or service provides less satisfaction than the previous unit.<\/p>\n
Total utility is maximized when marginal utility is equal to zero. This is because when marginal utility is equal to zero, the consumer is receiving the most satisfaction possible from consuming the good or service. If the consumer consumes more of the good or service, marginal utility will be negative and the consumer will experience a decrease in satisfaction.<\/p>\n
Option A is incorrect because marginal utility is zero when total utility is at its maximum.<\/p>\n
Option B is incorrect because total utility is not always at its highest when marginal utility is the highest.<\/p>\n
Option C is incorrect because marginal utility is not always the highest when total utility is at its maximum.<\/p>\n","protected":false},"excerpt":{"rendered":"
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