Question

david buys pizza from the campus pizzeria. he calculates his total utility from pizza as follows:

slices of pizza	total utility
1	12
2	17
3	20
4	22

all of the following statements regarding david’s utility from pizza are true except

a. to increase his marginal utility from a slice of pizza, david must consume less.

b. david’s total utility is increasing at a decreasing rate.

c. david experiences increasing marginal utility since his total utility is rising.

d. david experiences diminishing marginal utility.

Explanation:

1. First, calculate marginal utility (MU) as the change in total utility (TU) for each additional slice:

• For 1st slice: \( MU_1 = 12 - 0 = 12 \)
• For 2nd slice: \( MU_2 = 17 - 12 = 5 \)
• For 3rd slice: \( MU_3 = 20 - 17 = 3 \)
• For 4th slice: \( MU_4 = 22 - 20 = 2 \)

1. Analyze each option:

• Option A: Since MU is decreasing, consuming less (e.g., from 2 slices to 1) would increase MU (from 5 to 12). So A is true.
• Option B: TU is increasing (0, 12, 17, 20, 22) but the rate of increase (MU) is decreasing (12, 5, 3, 2). So B is true.
• Option C: MU is decreasing (12, 5, 3, 2), so David experiences diminishing, not increasing, marginal utility. Total utility rising doesn't mean marginal utility is increasing. So C is false.
• Option D: As calculated, MU is decreasing (12 > 5 > 3 > 2), so D is true.

Answer:

C. David experiences increasing marginal utility since his total utility is rising.