A consumer derives a total utility of 50 utils from consuming 4 packs of biscuits and 62 u… — JAMB UTME

A consumer derives a total utility of $50$ utils from consuming $4$ packs of biscuits and $62$ utils after consuming the $5^{\text{th}}$ pack. What is the marginal utility of the $5^{\text{th}}$ pack of biscuits?

$12$ utilsAnswer
B
$62$ utils
C
$12.4$ utils
D
$112$ utils

Answer

The marginal utility of the

5^{\text{th}}

pack of biscuits is

12

utils.

Marginal utility measures the addition to total utility derived from consuming one extra unit of a good. Subtracting the total utility of

4

packs (

50

utils) from the total utility of

5

packs (

62

utils) yields

12

utils.

Step-by-Step Solution

Identify the formula for Marginal Utility (MU)

\text{MU} = \frac{\Delta \text{TU}}{\Delta Q} = \text{TU}_n - \text{TU}_{n-1}

Marginal Utility measures the extra satisfaction gained from consuming one more unit of a commodity.

Substitute the given values into the formula

\text{MU}_5 = 62 - 50 = 12

utils

Subtracting the total utility of

4

units (

50

utils) from the total utility of

5

units (

62

utils) gives the marginal utility of the

5^{\text{th}}

unit.

Key Concept

Marginal Utility Calculation

Estimated Time:45s

Question

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Step-by-Step Solution

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