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.

ECON MICRO
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ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter6: Consumer Choice And Demand
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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
Transcribed Image Text: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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