Assume the total utilities corresponding to the first four units of a product consumed are 8, 12, 14, and 15, respectively. The marginal utility of the second unit consumed is:
A) 0.
B) 4.
C) 12.
D) 20.

Question

Quizplus · Accepted Answer

The marginal utility is the additional utility gained from consuming one more unit of a good, and is calculated by taking the difference in utility between the current and previous units consumed.

In this case, the marginal utility of the second unit consumed is:
MU2 = Utility from 2 units - Utility from 1 unit
MU2 = 12 - 8
MU2 = 4

Therefore, the answer is B) 4.

As for the best choice, it would depend on the specific situation and preferences. However, if we assume that the product being consumed has a fixed price, the rational consumer would continue consuming units as long as the marginal utility exceeds or equals the price. Once the marginal utility falls below the price, it would not be rational to consume any further units.

Assume the Total Utilities Corresponding to the First Four Units