GK
BUSINESS ECONOMICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Tastes change over time
|
|
|
Consumption is continuous
|
|
|
Different units of goods consumed are homogeneous
|
|
|
None of these
|
Detailed explanation-1: -The law of diminishing marginal utility holds that as we consume more of an item, the amount of satisfaction produced by each additional unit of that good declines. The change in utility gained from utilizing an additional unit of a product is known as marginal utility.
Detailed explanation-2: -The Principle of Diminishing Marginal Rate of Substitution The assumption of diminishing MRS posits that when a consumer substitutes commodity X for commodity Y, the stock of X decreases, and that of Y decreases, while the MRS decreases.
Detailed explanation-3: -Yes, the law of DMU depends on assumptions. Assumptions of DMU: Cardinal measurement of utility: it is assumed that utility can be measured and it can be expressed in numerical terms as 1, 2, 3, etc.