A consumer consumes successive cups of ice cream. The total utility (TU) derived from the … — JAMB UTME

A consumer consumes successive cups of ice cream. The total utility ( $TU$ ) derived from the 1st, 2nd, 3rd, and 4th cups is $15$ utils, $25$ utils, $30$ utils, and $30$ utils respectively. What is the marginal utility ( $MU$ ) of the 4th cup of ice cream?

$0$ utilsAnswer
B
$30$ utils
C
$7.5$ utils
D
$5$ utils

Answer

The marginal utility of the 4th cup of ice cream is

0

utils.

Marginal Utility (

MU

) measures the change in Total Utility (

TU

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

MU_4 = TU_4 - TU_3

, we subtract

30

utils (

TU_3

) from

30

utils (

TU_4

) to obtain

0

utils.

Step-by-Step Solution

Identify the Total Utility (

TU

) values for the 3rd and 4th units.

TU_3 = 30

utils and

TU_4 = 30

utils.

Calculating marginal utility requires comparing total utility before and after consuming the 4th unit.

Apply the Marginal Utility formula

MU_n = TU_n - TU_{n-1}

MU_4 = 30 - 30 = 0

utils.

The 4th cup adds zero extra utility, reaching the consumer's point of satiety.

Key Concept

Calculation of Marginal Utility from Total Utility

Question

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Step-by-Step Solution

Key Concept

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