Which statement is FALSE?
A) To calculate total utility, sum the marginal utilities of the individual units consumed.
B) Marginal utility is usually smaller than total utility.
C) Marginal utility generally diminishes as more of a good is consumed.
D) The consumer is assumed to maximize marginal utility.

Question

Quizplus · Accepted Answer

The consumer is assumed to maximize total utility, not marginal utility. Marginal utility is the additional satisfaction or utility that a consumer receives from consuming an additional unit of a good or service, and it typically decreases as consumption increases. The goal of the consumer is to allocate their resources in a way that maximizes their total utility, not just the marginal utility of a single good or service.

Which Statement Is FALSE