Help with econ homework!!
By Trish012
@Trish012 (101)
Puerto Rico
April 9, 2007 9:36am CST
Suppose your marginal utility for meals at the campus cafeteria this week has fallen to zero. Explain what has happened to your total utility curve derived from consuming these meals. Now explain what will happen to total utility if you eat more meals at the cafeteria this week.
Thanks
2 responses
@guilinfd (76)
• China
26 Apr 07
our total utitily curve is just at the peak, so if you eat more, your total utitily decrease.
@gbolly54 (661)
• Nigeria
9 Apr 07
When marginal utility is zero, the marginal utility curve is at its peak. Any additional consumption will make the extra utility to be negative, making the marginal utility curve to start sloping down. Marginal utility (mu)is the extra satisfaction derived from consuming an additional unit of a product or service. Initially, mu keeps increasing as more of an item is consumed. After a certain point, mu will still be positive, but reducing until it gets to a level of zero, and then negative eventually. That explains why discounts are offered to induce large purchases, because consumers attach progressively lower values to subsequent units consumed.