If Total Utility Is Increasing as More Units Are Consumed

question 65

Multiple Choice

If total utility is increasing as more units are consumed, then marginal utility must be

• A) increasing.
• B) positive.
• C) increasing at an increasing rate.
• D) decreasing at an increasing rate.
• E) negative.

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Definitions:

Marginal Benefit

The additional satisfaction or value gained from consuming or producing one more unit of a good or service.

Marginal Cost

The cost added by producing one additional unit of a product or service.

Marginal Analysis

An examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.

Additional Costs

Expenses that are not initially planned or anticipated, which can arise during the course of a project or as part of an operation.