Solve in English

English

ScanSolve AI Answer

To answer these questions, we will analyze the graph of marginal utility (MUx) as a function of the quantity consumed of commodity X.

  • The y-axis (vertical) represents marginal utility (MUx).
  • The x-axis (horizontal) represents the quantity of X consumed.
  • The marginal utility curve is downward-sloping.
  • Marginal utility is zero (MUx = 0) when the quantity of X is 6 units.
  • Marginal utility is negative when the quantity of X is greater than 6 units.

a) At what level(s) of consumption of commodity X is:

  • i) the consumer at the point of saturation; The point of saturation is reached when the marginal utility (MUx) is equal to zero. From the graph, this occurs when the quantity of X consumed is 6 units.

    6 units\boxed{\text{6 units}}
  • ii) the marginal utility of X (MUx) decreasing but positive; Marginal utility is decreasing throughout the graph. It is positive when it is above the x-axis (MUx > 0). This occurs for quantities of 1, 2, 3, 4, and 5 units.

    1, 2, 3, 4, 5 units\boxed{\text{1, 2, 3, 4, 5 units}}
  • iii) the total utility of X (TUx) decreasing; Total utility (TUx) begins to decrease when marginal utility (MUx) becomes negative. From the graph, MUx is negative for quantities greater than 6 units, i.e., from 7 units onwards.

    7 units and above\boxed{\text{7 units and above}}
  • iv) the total utility of X (TUx) at its maximum? Total utility (TUx) is at its maximum when marginal utility (MUx) is equal to zero. From the graph, this occurs when the quantity of X consumed is 6 units.

    6 units\boxed{\text{6 units}}
Was this helpful?

Still stuck on this one?

Ask a follow-up, and the answer starts from this question.

Got a different question?Ask your own question