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Question
Fill in the blank with appropriate alternatives given below:
When MU is ______________ TU decreases.
Options
positive
negative
zero
high
Solution
When MU is negative, TU decreases.
Explanation: Total Utility TU depends upon the Marginal Utility MU . Marginal utility depicts the addition to total utility when an additional unit of the commodity is consumed. A negative marginal utlity suggests that additional to total utility is negative. Thus, total utility is falling.
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