Economics 19th Edition by Stanley Brue, Cambell McConnell, Campbell McConnell, Sean Masaki Flynn, Sean Flynn

Exercise 2

FIGURE 6.1 Total and marginal utility. Curves TU and MU are graphed from the data in the table. (a) As more of a product is consumed, total utility increases at a diminishing rate, reaches a maximum, and then declines. (b) Marginal utility, by definition, reflects the changes in total utility. Thus marginal utility diminishes with increased consumption, becomes zero when total utility is at a maximum, and is negative when total utility declines. As shown by the shaded rectangles in (a) and (b), marginal utility is the change in total utility associated with each additional taco. Or, alternatively, each new level of total utility is found by adding marginal utility to the preceding level of total utility.
Marginal utility in Figure 6.1b is positive, but declining, when total utility in Figure 6.1a is positive and:
A) rising at an increasing rate.
B) falling at an increasing rate.
C) rising at a decreasing rate.
D) falling at a decreasing rate.