Question

Which one of the following is true? When the marginal utility becomes negative:

• A. the total utility becomes negative.
• B. the total utility decreases.
• C. the total utility becomes zero.
• D. the total utility will increase but at a slower rate.

Hint:

Negative marginal utility means consuming more leads to reduced total satisfaction.

Answer 1

The Correct Option is B

Step 1: Understand the concept of marginal utility.
Marginal utility is the additional satisfaction or benefit derived from consuming one more unit of a good or service. When marginal utility is positive, total utility increases with each additional unit consumed. However, once marginal utility becomes negative, the consumption of additional units reduces total satisfaction.
Step 2: Impact of negative marginal utility on total utility.
When marginal utility becomes negative, the total utility stops increasing and begins to decrease. This is because the additional consumption of a good or service leads to a decrease in overall satisfaction.
Step 3: Conclusion.
Thus, the correct answer is (B) the total utility decreases, as negative marginal utility implies a reduction in total satisfaction. Final Answer: \[ \boxed{\text{The total utility decreases.}} \]