Read the following statements carefully.
Statement I: The marginal utility of the 5th banana is the total utility of 5 bananas minus the total utility of 4 bananas.
Statement II: The total utility of 5 bananas is the marginal utility of the 5th banana multiplied by 5.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Statement I is true but Statement II is false.
MU is the change in TU from one more unit, and TU is the sum of the MUs of all the units.
Statement I: The marginal utility of the 5th banana is the total utility of 5 bananas minus the total utility of 4 bananas. — True. MU5 = TU5 − TU4.
Statement II: The total utility of 5 bananas is the marginal utility of the 5th banana multiplied by 5. — False. TU5 = MU1 + MU2 + … + MU5. The MUs differ from unit to unit, so multiplying MU5 by 5 gives the wrong total.
NCERT (2026-27): “Measures of Utility … Marginal Utility: Marginal utility (MU) is the change in total utility due to consumption of one additional unit of a commodity. For example, suppose 4 bananas give us 28 units of total utility and 5 bananas give us 30 units of total utility. Clearly, consumption of the 5th banana has caused total utility to increase by 2 units (30 units minus 28 units). Therefore, marginal utility of the 5th banana is 2 units. MU5 = TU5 – TU4 = 30 – 28 = 2 … Total utility and marginal utility can also be related in the following way. TUn = MU1 + MU2 + … + MUn-1 + MUn …” |