Identify the truthfulness of the following statements. I. Diminishing marginal utility and increasing total utility are incompatible with each other.
II) When marginal utility is negative, total utility is decreasing.
A) Both I and II are true.
B) Both I and II are false.
C) I is true; II is false.
D) I is false; II is true.

Question

Quizplus · Accepted Answer

Diminishing marginal utility means each additional unit adds less to total utility, but total utility can still increase. When marginal utility is negative, total utility decreases.

Identify the Truthfulness of the Following Statements