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JAMB Economics 2006 Question 14

Question 14

Theory of Consumer Behaviour

If the marginal utility of good X exceeds that of good Y, this implies that

  1. A.a rational consumer will buy less of X
  2. B.consuming more of X will increase total utility
  3. C.Y is an inferior good
  4. D.X will be cheaper than Y
Show the answer and explanation

Answer: B (consuming more of X will increase total utility)

Explanation

As long as marginal utility of X is positive, consuming more of X adds to total utility; here X's extra unit gives more satisfaction than Y's.