Explanation Yes, it is possible. Total utility increases as long as marginal utility is positive. When total utility starts falling, the marginal utility becomes negative...

EBK ECON MICRO

6th Edition

ISBN: 9781337671828

Author: MCEACHERN

Publisher: CENGAGE LEARNING - CONSIGNMENT

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Question

Chapter 6, Problem 3P

To determine

The circumstances under which MU is negative and TU is positive.

Concept Introduction:

Law of Diminishing Marginal Utility: The law states that as we consume more and more of a unit, the successive utility from consuming additional units goes on falling. In other words, the marginal utility goes on falling as we consume more of a good.

Expert Solution & Answer

Chapter 6 Solutions

EBK ECON MICRO

Ch. 6 - Prob. 1P Ch. 6 - Prob. 2P Ch. 6 - Prob. 3P Ch. 6 - Prob. 4P Ch. 6 - Prob. 5P Ch. 6 - Prob. 6P Ch. 6 - Prob. 7P Ch. 6 - Prob. 8P Ch. 6 - Prob. 9P Ch. 6 - Prob. 10P

Solution Summary: The author explains that the law of diminishing marginal utility states that as we consume more of a good, the successive utility from consuming additional units goes on falling.

Chapter 6 Solutions