B1: By keeping in view the concepts of Marginal Utility (MU) and Total Utility (
ID: 1174241 • Letter: B
Question
B1: By keeping in view the concepts of Marginal Utility (MU) and Total Utility (TU) complete the following table and answer the questions given below the table. Units Consumed of Good A Total Utility(TU) 20 35 45 50 50 45 35 Marginal Utility(MU) 2 4 6 a. What is the Marginal UWtility by consuming 3 units of good A? (CLO:AR1:1 markj) b. At what level of consumption, Marginal utility will be Zero? (CLO:AR1:1 markg) c. At what level of consumption, TU will reaches at Maximum? (CLO:AR1:1 mark) d. At what level of consumption, Marginal utility is Negative? (CLO:AR1:1 mark) Page 4 of 8Explanation / Answer
Answer:
Marginal utility
Marginal utility is the extra fulfillment a buyer picks up from expending one more unit of a decent or administration. Marginal utility is an imperative monetary idea since financial analysts utilize it to decide the amount of a thing a buyer will purchase.
Given consumed goods and total utility find marginal utility in the given table,
Units consumed good A
Total utility
Marginal utility
1
20
20
2
35
15
3
45
10
4
50
5
5
50
0
6
45
-5
7
35
-10
By solving the above table we get marginal utility of Units Consumed goods A is :
a) Marginal Utility of 3rd Consuming Units of good A is 10
we get 45-35=10
b) At what level of consumption, Marginal utility will be zero
From the table, we observe that 5th consuming Units of Good A is zero.
by solving above table 50-50=0
c) At what level of consumption, TU reaches at maximum
Fourth and Fifth level Total utility reaches a Maximun value.
d) At what level of consumption, Marginal utility is Negative
Sixth and Seventh level the Marginal utility is Negative.
Sixth level = 45-50 = -5
Seventh level = 35-45 = -10
S
Units consumed good A
Total utility
Marginal utility
1
20
20
2
35
15
3
45
10
4
50
5
5
50
0
6
45
-5
7
35
-10
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