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CSS Micro Macro Economics P-I QUESTION #1683
Question 1
In consumer theory, the marginal utility of consuming a good is most precisely defined as the:
  • Total utility derived from the good before the last unit is consumed
  • Additional utility gained from consuming one more unit of the good✔️
  • Utility derived from consuming a different, substitute good
  • Consumer surplus generated from the consumption of an alternative good
Correct Answer Explanation
Marginal utility (MU) is the additional (incremental) utility or satisfaction a consumer derives from consuming one more unit of a good, holding all else constant. Mathematically: \(MU = \dfrac{\Delta TU}{\Delta Q}\). The Law of Diminishing Marginal Utility states that MU typically declines as more units are consumed. It is the foundational concept in cardinal utility analysis and the derivation of the demand curve.