Marginal utility of first unit is ____ to the total utility of first unit.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Equal
The marginal utility of the first unit is equal to the total utility of the first unit.
Here's why:
- Marginal utility refers to the additional satisfaction gained from consuming one more unit of a good or service.
- Total utility represents the overall satisfaction derived from consuming all units of a good or service.
For the first unit consumed, there's no concept of "additional" satisfaction because there's no prior consumption. The entire satisfaction you get comes from that single unit. So, in this case, the marginal utility and total utility for the first unit are the same.