State the following statements are True or False: 3. MU and TU are equal at the initial stage.

State the following statements are True or False:
3. MU and TU are equal at the initial stage.
ANSWER:
3) 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, TUnMU1MU2MU3+.............. + MUn= ∑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.


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