Question

State the following statement is True or False: 

MU and TU are equal at the initial stage.

Options

• True
• False

Answer 1

MU and TU are equal at the initial stage. -True

Explanation: Total utility TU refers to the aggregate utility, or the summation of utility, derived from the consumption of all the units of a commodity. Algebraically, TU_n = MU₁ + MU₂ + MU₃ +.............. + MU_n = ∑MU At the initial stage i.e. at the first unit of consumption, Marginal Utility MU and Total Utility TU are equal. That is, MU = TU.

Number of Units Consumed of Commodity (X)	Total Utility (TU) (utils)	Marginal Utility (MU) MUn = TUn − TUn − 1 (utils)
1	50*	50 − 0 = 50*
2	100	100 − 50 = 50
3	130	130 − 100 = 30

* TU and MU are equal at the initial phase.