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Question
In the following Question, read the following statement: Assertion (A) and Reason (R). Choose the correct alternative among those given below:
Assertion (A): Marginal Utility can never be negative.
Reason (R): Total Utility is maximum when Marginal Utility is zero.
Options
Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is True but Reason (R) is False.
Assertion (A) is False but Reason (R) is True.
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Solution
Assertion (A) is False but Reason (R) is True.
Explanation:
The assertion is false because marginal utility can become negative when an additional unit reduces total utility; this is called disutility. The reason is true: total utility is maximum at the point of satiety, where marginal utility is zero. Therefore, (d) is correct.
