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Which of the following statement is false? When MU is negative, TU will be increasing. When MU is positive, TU will be decreasing. When MU is zero, TU is maximum. -

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Question

Which of the following statement is false?

Options

  • When MU is negative, TU will be increasing.

  • When MU is positive, TU will be decreasing.

  • When MU is zero, TU is maximum.

  • None of these

MCQ

Solution

When MU is zero, TU is maximum.

Explanation:

Relationship between Total Utility and Marginal Utility:

(i) When the MU is positive, the TU rises.

(ii) TU is greatest when MU is zero.

(iii) When MU is negative, the value of TU decreases.

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Cardinal Approach (Utility Analysis)
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