Question

Q7.With the help of a diagram explain the relationship between TotalUtility and marginal utility​

Answer 1

Answer:

The relation between total and marginal utility is explained with the help of Table 1. So long as total utility is increasing, marginal utility is decreasing up to the 4th unit. When total utility is maximum at the 5th unit, marginal utility is zero. It is the point of satiety for the consumer follow me.

Answer 2

Total utility is the sum total of utilities derived from the consumption of different units of a commodity.

TU=£MU

Marginal utility is additional utility when a unit more of a commodity is consumed.

MUnth = TU -TUn-1

Explanation:

1. TU increases so long as MU is +ve.

2. TU is maximum when MU=0.

3. TU starts declining when MU is -ve.

4. Decreasing MU imples that TU increases at a decreasing rote (MU is the rate of TU)