4 Views

Question : According to the law of diminishing marginal utility, as a consumer consumes more of a good:

Option 1: The total utility derived from the good increases at a decreasing rate.

Option 2: The marginal utility derived from the good increases at a decreasing rate.

Option 3: The total utility derived from the good decreases at a decreasing rate.

Option 4: The marginal utility derived from the good decreases at a decreasing rate.


Team Careers360 8th Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: The marginal utility derived from the good decreases at a decreasing rate.


Solution : The answer is (d) The marginal utility derived from the good decreases at a decreasing rate.

The law of diminishing marginal utility states that as a consumer consumes more of a good, the marginal utility derived from each additional unit of the good decreases. This means that the first unit of the good provides the most utility, the second unit provides less utility, and so on.

The law of diminishing marginal utility is an important concept in economics because it helps us to understand how consumers make decisions about what goods and services to purchase. It also helps us to understand why demand curves are downward sloping.

Related Questions

UPES Integrated LLB Admission...
Apply
Ranked #28 amongst Institutions in India by NIRF | Ranked #1 in India for Academic Reputation by QS University Rankings | 16.6 LPA Highest CTC
Jindal Global Law School Admi...
Apply
Ranked #1 Law School in India & South Asia by QS- World University Rankings | Merit cum means scholarships
Symbiosis Law School Pune Adm...
Apply
NAAC A++ Accredited | Ranked #5 by NIRF
Nirma University Law Admissio...
Apply
Grade 'A+' accredited by NAAC
Alliance University BA/BBA LL...
Apply
Approved by Bar Council of India (BCI)
Woxsen University | Law Admis...
Apply
BBA -LLB (Hons.) & BA -LLB (Hons.) @ Woxsen University. BCI approved | Industry Endorsed Curriculum
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books