ECONOMICS
CONSUMERS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The additional satisfaction received from consuming extra units of a good decreases as consumption of the good increases
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Total satisfaction decreases as more units of a good are consumed
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The additional satisfaction received from consuming extra units of a good decreases as consumption of the good decreases
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When marginal utility is decreasing, total utility is decreasing
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Detailed explanation-1: -The correct option is B Diminish. Explanation: The Law of Diminishing Marginal Utility states that marginal utility from consuming each additional unit of a commodity declines as its consumption increases.
Detailed explanation-2: -Which of the following statements is true of the law of diminishing marginal utility? The law of diminishing marginal utility states that as more units of a good are consumed, the marginal utility from the consumption of the next unit becomes lesser.
Detailed explanation-3: -Law of diminishing marginal utility is based on psychological law that as more and more units of a commodity is consumed, marginal utility derived from every successive unit will decline in respect to all goods with a few exception. Was this answer helpful?
Detailed explanation-4: -When we consume more units of a particular good, marginal utility from consumption of new units will decrease until it eventually becomes negative. A good’s total utility increases with diminishing returns until it becomes constant and starts falling.