The concept of marginal utility:
A) explains why individuals find it difficult to maximize their total utility.
B) is the change in total utility that comes from consuming one additional unit of a good or service.
C) can only be applied to situations in which individuals can choose among several goods or services.
D) is the loss in utility from making a bad decision.

Question

Quizplus · Accepted Answer

Marginal utility is the additional utility gained from consuming one additional unit of a good or service. It is the change in total utility resulting from that additional unit. Option A is not correct because marginal utility helps individuals make decisions that can maximize their total utility. Option C is not completely accurate as marginal utility can also be applied to situations where an individual is consuming only one good or service. Option D is not correct as marginal utility does not account for bad decisions, but rather the additional satisfaction gained from consuming an additional unit.

The Concept of Marginal Utility