📚 Learning Guide
Marginal Utility and Consumer Choice
easy

If a consumer derives a total utility of 60 from consuming 3 units of a good, and the total utility from consuming 4 units is 70, what is the marginal utility of the fourth unit?

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Learning Path

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Choose the Best Answer

A

10

B

20

C

30

D

40

Understanding the Answer

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Answer

To find the marginal utility of the fourth unit, we need to look at the change in total utility when consuming that unit. Total utility is the overall satisfaction a consumer gets from consuming goods. In this case, the total utility from consuming 3 units is 60, and from consuming 4 units, it is 70. The marginal utility is the additional satisfaction gained from consuming one more unit, which we calculate by subtracting the total utility of 3 units from the total utility of 4 units. So, 70 (total utility from 4 units) minus 60 (total utility from 3 units) gives us a marginal utility of 10 for the fourth unit.

Detailed Explanation

The marginal utility is the extra satisfaction from one more unit. Other options are incorrect because This answer suggests that the extra satisfaction is much higher; This answer is too high for just one extra unit.

Key Concepts

Total utility
Topic

Marginal Utility and Consumer Choice

Difficulty

easy level question

Cognitive Level

understand

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