Question

Suppose you are eating buffalo wings at a local happy hour. The total utils from doing so after the fourth, fifth, sixth, and seventh wings are 30, 50, 65, 72, respectively. In this situation we have __________ marginal utility, which is generally __________ in the analysis of consumer choice.
a. 14
b. 136
c. 20
d. 22.

Answer 1

Answer:

diminishing ; assumed

Explanation:

Given:

total utils from doing so after

the fourth, fifth, sixth, and seventh wings are 30, 50, 65, 72

Now,

marginal utility from fifth = total utility from fifth - total utility from fourth

= 50 - 30

= 20 utils.

marginal utility from sixth = total utility from sixth - total utility from fifth

= 65 - 50

= 15 utils.

marginal utility from seventh = total utility from  - total utility from sixth

= 72 - 65

= 7 utils.

Here,

the marginal utility is diminishing i.e from 20 to 15 and from 15 to 7 utils

also,

it is assumed that the marginal utility will decrease when we analyse the consumer utility because the consumers gets satisfied and thus, the increase in satisfaction leads to the decrease in utility

hence, the answer is diminishing ; assumed