Chapter 51, Problem 6MCQ

To determine

The total utility by consuming 8^th carrot where the seventh carrot provides a marginal utility of 3 utils and the eighth carrot provides a marginal utility of 2 utils.

Explanation of Solution

As the marginal utility adds to total utility and the 8th carrot delivers marginal utility of 2 utils then it means the total utility will increase by 2. Because the total utility is 5 utils when eighth carrot is consumed.

  $\begin{array}{l}\begin{array}{l}\text{Total utility = Marginal utility at the time 7th carrot is consumed + marginal utility at the time }\\ \text{ when 8th carrot is consumed}\end{array}\hfill \\ \hfill \\ \text{ = 3 utils + 2 utils}\hfill \\ \hfill \\ \text{ = 5 utils}\hfill \end{array}$

Here the total utility is increase by 2 (5-3 = 2)

Therefore, the correct option is d.

Economics Concept Introduction

Introduction:

Marginal utility refers to the benefit or satisfaction of person by consuming one additional unit of the good.