Answer the Following Question. Define Marginal Utility. When Can It Be Negative? - Economics

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One Line Answer

Answer the following question. 
Define marginal utility. When can it be negative?

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Solution

Marginal utility is the net addition made to total utility by the consumption of an additional unit.  `""^"M"u_"n" = ""^"T"u_"n" – ""^"T"u_"n" - 1`. when total utility is maximum, marginal utility is zero.

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2014-2015 (March) Set 1

RELATED QUESTIONS

Answer the following question.
Explain the relationship between Total utility and Marginal utility.


 State whether the following statements are TRUE or FALSE:  

 Marginal utility increases with increase in consumption. 


 State whether the following statements are TRUE or FALSE:  

 In deficit budget, expenditure is more than income. 


Choose the correct answer :      

The capacity of a commodity to satisfy human want is known as _________. 


Do you agree with the following statements? Give reasons. 

Marginal utility and Total utility is same. 


Fill in the blanks with appropriate alternatives given in the bracket.  

 Marginal consumption function is always ________. 


Fill in the blank with appropriate alternatives given below:

Marginal utility diminishes, as consumption of commodity ________.


Fill in the blank with appropriate alternatives given below:

_________________ utility is the utility derived from the last unit of the commodity consumed.


Fill in the blank with appropriate alternatives given below:

When MU is ______________ TU decreases.


State the following statement is True or False:

MU and TU are equal at the initial stage.


Define or explain the following concept:

Total utility


Define or explain the following concept:

Marginal utility 


Give reason or explain:

Utility is a psychological term. 


Give reason or explain:

Utility is ethically neutral.


Write short note on:

Equi-marginal utility


Answer the following question:

Explain the relationship between TU and MU.


State with reason whether you agree or disagree:

 When MU is zero, TU diminishes.


Answer the following question.
Discuss briefly, using a hypothetical schedule, the relation between marginal utility and total utility.


Choose the correct answer from given options

When marginal utility is zero, total utility is


Explain the Law of Equi-Marginal Utility


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