Question

Consider the movements that take place from one point to the next ( $A$to $B$to $C$and so on) along the total utility curve as the individual successively increases consumption by one more unit, and answer the questions that follow.

a. Which one-unit increase in consumption from one point to the next along the total utility curve gencrates the highest marginal utility?

b. Which one-unit increase in consumption from one point to the next along the total utility curve gencrates zero marginal utility?

c. Which one-unit increase in consumption from one point to the next along the total utility curve generates negative marginal utility?

Short answer

a. The first week's marginal utility is $5$units.

b. the marginal utility of points $E$to $F$is zero.

c. The graph above reveals that the points $F$to $G$

Step-by-step solution

    Introduction

A graphical representation of total utility and usage per week is shown below. The various points on the total utility curve represent various levels of utility.

The consumption and total utility of per week are represented graphically above, with consumption on the $x$-axis and total utility on the $y$-axis. A total utility curve is defined as the line connecting the points $A$and$G$.

Step:     Option a Given diagram

(a) The highest marginal utility, i.e. $5$units, is generated by points $A$to $B$in the diagram. The first week's marginal utility is $5$units.

    Option b

(b) The following figure shows that the marginal utility of points $E$to $F$is zero. The total utility is highest and constant at these positions, i.e. $11$units.

    Option c 

(c) The graph above reveals that the points $F$to $G$have negative marginal utility Le. $-1$. Total utility begins to decrease at this time, going from $11$to $12$units.