Marginal Utility is the
Marginal Utility is the
- A) pleasure or satisfaction from consuming a particular quantity of a good
- B) average utility per unit consumed
- C) change in total utility that results from a one unit change in the quantity of a good consumes
- D) quanitity of goods that a consumer prefers
Correct Answer: C) change in total utility that results from a one unit change in the quantity of a good consumes
Explanation
This question is about Marginal Utility, which is a term used in Economics to describe the change in total satisfaction or usefulness that a consumer experiences from consuming one additional unit of a product. The question asks you to choose the correct definition of Marginal Utility from the given options.
Option A defines Marginal Utility as the pleasure or satisfaction a consumer gets from consuming a particular quantity of a good. While this definition is related to Marginal Utility, it is not the correct one.
Option B defines Marginal Utility as the average utility per unit consumed. This definition is also not correct.
Option C is the correct definition of Marginal Utility. It states that Marginal Utility is the change in total utility that results from consuming one additional unit of a product. In other words, it is the additional satisfaction or usefulness that a consumer gets from consuming one more unit of a product.
Option D defines Marginal Utility as the quantity of goods that a consumer prefers. This definition is not correct.
Understanding Marginal Utility is important in Economics as it helps to explain the behavior of consumers. It shows that as a consumer consumes more units of a product, the additional satisfaction or usefulness they get from each additional unit decreases. This is called the Law of Diminishing Marginal Utility.
In summary, the correct definition of Marginal Utility is option C, which states that Marginal Utility is the change in total utility that results from a one unit change in the quantity of a good consumed.