Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P x . Assume that P = $8, I = 200, and P x = $10.
-When the marginal utility derived from a good is negative, total utility is _____.
A)increasing
B)at a minimum
C)equal to zero
D)decreasing
E)at a maximum

Question

Quizplus · Accepted Answer

When the marginal utility derived from a good is negative, the total utility is decreasing. This is because the negative marginal utility indicates that each additional unit of the good consumed reduces the total satisfaction or utility derived from the goods. Therefore, the best option would be to consume fewer units of the good to maximize total utility.

Scenario 5.1 The Demand for Noodles Is Given by the Following Equation