Table 4.1 - Utility schedule
Complete the table and then use the information to answer the question(s)below.
-In Table 4.1,diminishing marginal utility occurs:
A) With the second and fourth units only.
B) With the first and third units only.
C) Only with the second unit.
D) With all of the units after the first.

Question

Table 4.1 - Utility schedule
Complete the table and then use the information to answer the question(s)below. 
-In Table 4.1,diminishing marginal utility occurs:
A) With the second and fourth units only. 
B) With the first and third units only. 
C) Only with the second unit. 
D) With all of the units after the first.

Quizplus · Accepted Answer

The utility schedule shows that each additional unit of the good provides a lower level of marginal utility than the previous unit, indicating diminishing marginal utility. Therefore, this occurs with all units after the first. The rational choice for a consumer is to consume up until the point where the marginal utility equals the price of the good, as any additional consumption beyond that point results in diminishing utility and decreased satisfaction.

Table 4.1 - Utility Schedule