Map Sapling Learning macmilian learning The graph below shows how Daisy\'s utili
ID: 1221166 • Letter: M
Question
Map Sapling Learning macmilian learning The graph below shows how Daisy's utility changes as she consumes candy. Based on the preferences shown in the graph, rank the pieces of candy from highest marginal utility to lowest marginal utility. The piece with the highest marginal utility should be placed highest and the lowest marginal utility placed lowest Total Utility Highest Marginal Utility 1st piece 2nd piece 3rd piece 6th piece 4th piece 5th piece Lowest Marginal Utility Utility Pieces of CandyExplanation / Answer
using the law of diminishing marginal utility is a law of economics stating that as a person increases consumption of a product, while keeping consumption of other products constant, there is a decline in themarginal utility that person derives from consuming each additional unit of that product. therefore, first piece of candy would be giving highest utility derived after its consumption. further that marginal utility is positive but its growing with diminishing rate.and this happens upto the point of cponsumption of 5th piece of candy.at 5th piece of candy, marginal utility is 0. and after that its neghative. so the person would be consuming negative porttion of marginal utility level associated with yth piece pof candy. thus 5th is lowest marginal utility leve; of candy consumption level. thus, highest martginal utility 1st candy > 2nd candy > 3rd candy > 4th candy > 5th candy ( lowest marginal utility )