Which of the following statements is true about the total utility provided by a good? A) Total utility can never be negative. B) Total utility is maximized when marginal utility is maximized. C) Total utility continues to increase as more of the good is consumed. D) Total utility is maximized when marginal utility is zero (for total utility 0). E) Total utility is maximized when marginal utility is zero (for total utility

Question

Which of the following statements is true about the total utility provided by a good?
A) Total utility can never be negative.
B) Total utility is maximized when marginal utility is maximized.
C) Total utility continues to increase as more of the good is consumed.
D) Total utility is maximized when marginal utility is zero (for total utility > 0).
E) Total utility is maximized when marginal utility is zero (for total utility < 0).

Quizplus · Accepted Answer

Total utility is maximized when the marginal utility of the last unit consumed is zero (for total utility greater than zero). This occurs because the marginal utility of each additional unit consumed decreases, eventually reaching zero. At this point, consuming any additional unit would actually decrease total utility. Therefore, total utility is maximized when no additional units can be consumed without decreasing total utility.

Which of the Following Statements Is True About the Total