A consumer derives a total utility (TU) of 50 utils from consuming 4 oranges. Upon consumi… — JAMB UTME

A consumer derives a total utility ( $TU$ ) of $50$ utils from consuming $4$ oranges. Upon consuming a $5^{\text{th}}$ orange, total utility increases to $62$ utils. What is the marginal utility ( $MU$ ) derived from consuming the $5^{\text{th}}$ orange in utils?

Answer: 12 utils

Answer

The marginal utility derived from consuming the 5th orange is 12 utils.

Marginal Utility (

MU

) represents the change in Total Utility (

TU

) resulting from consuming one additional unit of a good. Using

MU = \frac{\Delta TU}{\Delta Q}

, the change in total utility is

62 - 50 = 12

utils, and the change in quantity consumed is

5 - 4 = 1

orange. Therefore,

MU = \frac{12}{1} = 12

utils.

Step-by-Step Solution

Identify the total utility values before and after consuming the 5th orange.

TU_4 = 50

utils for

4

oranges, and

TU_5 = 62

utils for

5

oranges.

Marginal utility measures the addition to total utility from consuming one extra unit of a commodity.

Calculate Marginal Utility (

MU

) using the formula

MU_n = TU_n - TU_{n-1}

MU_5 = 62 - 50 = 12

utils.

Subtracting the previous total utility from the new total utility gives the marginal utility of the 5th unit.

Key Concept

Calculation of Marginal Utility from Total Utility

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