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

Exercise 3

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.
When marginal utility is zero in graph (b), total utility in graph (a) is:
a. also zero.
b. neither rising nor falling.
c. negative.
d. rising, but at a declining rate.