The table shows a consumer's utility schedule. Marginal utility begins to diminish with the consumption of the
A) fifth unit.
B) fourth unit.
C) third unit.
D) second unit.

Question

The table shows a consumer's utility schedule.  Marginal utility begins to diminish with the consumption of the
A) fifth unit. 
B) fourth unit. 
C) third unit. 
D) second unit.

Quizplus · Accepted Answer

Marginal utility is the additional utility gained from consuming an additional unit of the good. In this table, we can see that the marginal utility decreases from 24 to 16 when consuming the fourth unit. Therefore, the best choice would be to consume four units of the good to maximize utility. Any additional units consumed after the fourth unit would result in diminishing marginal utility, which would result in a decrease in overall utility.

The Table Shows a Consumer's Utility Schedule