For each of the following situations, decide whether Al has increasing, constant

Question

For each of the following situations, decide whether Al has increasing, constant or diminishing marginal utility? a. The more economic classes Al takes, the more he enjoys the subject. And the more classes he takes, the easier each one gets, making him enjoy each additional class even more than the one before. b. Al likes loud music. In fact according to him, "the louder, the better." Each time he turns the volume up a notch, he adds 5 utils to his total utility. c. Al enjoys watching reruns of the old sitcom Friends. He claims that these episodes are always funny, but he does admit that the more times he sees an episode, the less funny it gets. d. Al loves toasted marshmallows. The more he eats, however, the fuller he gets and the less he enjoys each additional marshmallow. And there is a point at which he becomes satisfied: beyond that point, more marshmallows actually make him feel worse rather than better.

Explanation / Answer

a. Increasing Marginal Utility

b. Constant Marginal Utility as the total utility is increasing by a constant amount each time.

c. Diminishing Marginal Utility.

d. Diminishing Marginal Utility

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