Figure 27-1.The figure shows a utility function.
-Refer to Figure 27-1.Let 0A represent the distance between the origin and point A; let AB represent the distance between point A and point B; etc.Which of the following ratios best represents the marginal utility per dollar when wealth increases from $400 to $600?
A) $\frac { 0 \mathrm {~A} } { 600 }$
B) $\frac { A B } { 600 }$
C) $\frac { 0 B } { 200 }$
D) $\frac { A B } { 200 }$

Question

Figure 27-1.The figure shows a utility function. 
-Refer to Figure 27-1.Let 0A represent the distance between the origin and point A; let AB represent the distance between point A and point B; etc.Which of the following ratios best represents the marginal utility per dollar when wealth increases from $400 to $600?
A) $\frac { 0 \mathrm {~A} } { 600 }$ 
B) $\frac { A B } { 600 }$ 
C) $\frac { 0 B } { 200 }$ 
D) $\frac { A B } { 200 }$

Quizplus · Accepted Answer

The marginal utility per dollar is calculated as the change in utility (AB) divided by the change in wealth ($200).

Figure 27-1 0 A600\frac { 0 \mathrm {~A} } { 600 }6000 A​

Figure 27-1 $\frac { 0 \mathrm {~A} } { 600 }$