Assume the Graph Shown Displays Nadia's Total Utility Function for Pairs

question 19

Multiple Choice

Assume the graph shown displays Nadia's total utility function for pairs of gloves. Which of the following statements is true?I. The marginal utility of the 10th of gloves is negative.II. The marginal utility of gloves increases first and then decreases.III. The marginal utility of the 6th pair of gloves is smaller than the marginal utility of the 1st pair of gloves.

• A)I and III
• B)II and III
• C)I and II
• D)I, II, and III

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Definitions:

Capital Goods

Long-lasting goods that are used in the production of other goods or services, such as machinery, buildings, and equipment.

Consumer Goods

Tangible items produced for personal use by individuals.

Production Possibilities Curve

A graphical representation showing the maximum number of goods or services that can be produced using limited resources efficiently.

Production Possibilities Curve

A graphical representation that shows the maximum amount of two goods that can be produced with available resources and technology.