Complete the following table and answer the questions below: Units Consumed Total Utility Marginal Utility 0 0 — 1 10 10 2 8 3 25 4 30 5 3 6 34 a. At which rate is total utility increasing: a constant rate, a decreasing rate, or an increasing rate? How do you know? b. True or False. “A rational consumer will purchase only 1 unit of the product represented by these data, because that amount maximizes marginal utility.” c. True or False. “It is possible that a rational consumer will not purchase any units of the product represented by these data.”
Complete the following table and answer the questions below:
| Units Consumed | Total Utility | |
|---|---|---|
| 0 | 0 | — |
| 1 | 10 | 10 |
| 2 | 8 | |
| 3 | 25 | |
| 4 | 30 | |
| 5 | 3 | |
| 6 | 34 |
a. At which rate is total utility increasing: a constant rate, a decreasing rate, or an increasing rate? How do you know?
b. True or False. “A rational consumer will purchase only 1 unit of the product represented by these data, because that amount maximizes marginal utility.”
c. True or False. “It is possible that a rational consumer will not purchase any units of the product represented by these data.”
Total utility is the total amount of happiness a consumer derives from a good at any particular level of consumption.
marginal utility is the change in total utility that a consumer experiences when one or more unit of a good is consumed.
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