Author Question: Which of the following statements about marginal utility is correct? a. When marginal utility is ... (Read 71 times)

xroflmao · **on:** Jun 30, 2018

Which of the following statements about marginal utility is correct?
a. When marginal utility is negative, an increase in the quantity will increase total utility.
b. When marginal utility is decreasing, an increase in quantity will decrease total utility.
c. When marginal utility is positive, an increase in quantity will decrease total utility.
d. When marginal utility is zero, an increase in quantity will leave total utility unchanged.
e. When total utility is increasing, marginal utility will be negative.

Question 2

If average variable cost exceeds average fixed cost at a particular level of output:
a. Profits must be positive.
b. That fact is meaningless for deciding the quantity of output to produce.
c. It is more likely that the output level is low relative to the designed capacity of the production facility than that the output level is low relative to the designed capacity of the production facility.
d. Both b and c. are likely true.