ECONOMICS
CONSUMERS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following can be referred to as ‘point of satiety’?
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MU is negative
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MU is zero
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TU is rising
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TU is falling
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Explanation:
Detailed explanation-1: -In economics, the point of satiety is defined as the point when the marginal utility of any activity is zero. From this point on, the marginal utility actually turns negative. Expressed differently, the point of satiety reflects that point when the total utility has been maximized.
Detailed explanation-2: -When TU is maximum, MU is zero. It is referred to as the saturation point.
Detailed explanation-3: -When TU becomes maximum, MU becomes 0. This is the point of satiety.
Detailed explanation-4: -When marginal utility (MU) is zero, total utility (TU) diminishes.
Detailed explanation-5: -Solution. Point of Satiety means TU is maximum and MU is zero.
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