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Question

At a point of satiety for a commodity the marginal utility is

This question was previously asked in
UGC NET 2014 Paper 1 Question Paper (28-Dec-2014)
The correct answer is

Zero

Marginal utility (MU) is the addition to total utility (TU) from one more unit of a good; under the law of diminishing marginal utility it falls as consumption rises.

While MU is positive, TU keeps rising. The point of satiety is where the consumer is fully satisfied and TU reaches its maximum.

At the maximum of TU, the extra unit adds nothing, so MU is zero; beyond satiety MU becomes negative and TU starts falling.

Hence, Zero.

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Similar Questions

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Important Questions from Utility analysis

  1. Utility derived from consumption of an additional unit of a good is called

  2. Which of the following statements is true?

  3. The word ‘marginal’ means _____.

  4. The law of diminishing marginal utility was propagated by:

  5. Ordinal utility analysis of the consumer's behaviour is considered superior to the cardinal utility analysis mainly due to
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