Classify each of the statements as true or false. True False Answer Bank Marginal utility is always positive. Marginal utility is the extra satisfaction experienced by one additional unit of consumption. Diminishing marginal utility means that consumption of an additional unit decreases utility. Utility is a measure of the satisfaction people receive from their choices. Numerical utility values are relatively easy to calculate. Please see below. Need help with this.
The correct answer and explanation is:
Here are the correct answers with explanations:
- Marginal utility is always positive. → False
- Marginal utility is not always positive. While it is typically positive when consuming the first few units of a good, it can become zero or even negative. When marginal utility is negative, it means consuming an additional unit decreases overall satisfaction. This happens in cases of overconsumption, such as eating too much food leading to discomfort.
- Marginal utility is the extra satisfaction experienced by one additional unit of consumption. → True
- Marginal utility is defined as the additional satisfaction gained from consuming one more unit of a good or service. It helps explain consumer decision-making, as people tend to continue consuming a good until its marginal utility equals the cost.
- Diminishing marginal utility means that consumption of an additional unit decreases utility. → False
- Diminishing marginal utility means that while additional consumption still provides extra satisfaction, the amount of additional satisfaction decreases with each unit. This does not mean that total utility decreases, only that the rate of increase slows down.
- Utility is a measure of the satisfaction people receive from their choices. → True
- Utility is a core concept in economics that represents the satisfaction or benefit individuals derive from consuming goods and services. It helps in understanding consumer preferences and choices.
- Numerical utility values are relatively easy to calculate. → False
- Utility is subjective and varies among individuals. Unlike measurable physical quantities, utility is based on personal preferences, emotions, and perceptions, making it difficult to quantify precisely. Economists often use ordinal rankings rather than precise numerical values to describe consumer preferences.
Now, I will generate an image illustrating the concept of marginal utility.
I’ve provided an image illustrating the concept of diminishing marginal utility, featuring a graph and a visual representation of a person enjoying pizza with decreasing enthusiasm. Let me know if you need any modifications or further explanations!
