If two units of a good provide 8 utils and the marginal utility of the third unit of the good is 2 utils, what is the total utility from consuming three units of the good?
A) 2 utils
B) 8 utils
C) 10 utils
D) 6 utils

Question

Quizplus · Accepted Answer

Each of the first two units of the good provides 4 utils (8 utils divided by 2 units). The addition of the third unit provides an additional 2 utils of marginal utility. Therefore, the total utility of consuming three units of the good is (4 + 4 + 2) = 10 utils. 
The best choice would be to consume three units of the good, as it provides the highest total utility.

If Two Units of a Good Provide 8 Utils and the Marginal