Problem: Complete the following table and answer the questions below:
Units Consumed Total Utility Marginal Utility
0 0 -
1 10 10
2 - 8
3 25
4 30 -
5 - 3
6 34 -
1. At which rate is total utility increasing: a constant rate, a decreasing rate, or an increasing rate? How do you know?
2. "A rational consumer will purchase only 1 unit of the product represented by these data, since that amount maximizes marginal utility." Do you agree? Explain why or why not.
3. "It is possible that a rational consumer will not purchase any units of the product represented by these data." Do you agree? Explain why or why not.