Q6 of 25 Page 1

Discuss the relationship between total utility and marginal utility, using a hypothetical schedule.

Total utility is the total sum of the utilities obtained by the consumer from different units of a commodity whereas Marginal utility is the addition made to total utility by having an additional unit of the commodity.


MUN = TUN —TUN-1



We can see in the table that as the total utilities increase the marginal utility decreases but when it is at maximum MU is 0. When TU decreases Mu is negative.


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__________ . (Choose the correct alternative)


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(a) The autonomy of the central bank of a country should be maintained as per the law.


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With the help of the given schedule, determine the firm’s equilibriumusing marginal revenue -marginal cost approach. Give valid reasons in support of your answer.

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The price of commodity increases from <10 to <14. Calculatepercentage fall in quantity demanded of the commodity if the coefficient of price elasticity of demand is (–) 1 �25.

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