Which of the following statements describe correct patterns for total and marginal utilities?(Select all correct answers)□ A. Marginal utility decreases but cannot become negative.□ B. Total utility increases faster and faster as consumption increasesOC. Total utility increases as consumption increases but eventually declinesO D. Marginal utility is greater than total utilityO E. Marginal utility decreases as consumption increases

Answered: Which of the following statements…

Which of the following statements describe correct patterns for total and marginal utilities? (Select all correct answers) A Marginal utility decreases but cannot become negative.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 3SQP

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Question

Which of the following statements describe correct patterns for total and marginal utilities?
(Select all correct answers)
□ A. Marginal utility decreases but cannot become negative.
□ B. Total utility increases faster and faster as consumption increases
OC. Total utility increases as consumption increases but eventually declines
O D. Marginal utility is greater than total utility
O E. Marginal utility decreases as consumption increases

Expert Solution

Step 1

Relationship between TU and MU

1) Tu increase at Diminishing rate when consumption of the commodity increses as long as MU is positive. But MU diminishes as consumption increase.

2) when TU is at its maximum point MU = 0

3) after this point when Consumption rises TU start falling and MU became negative.

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