Question : Assertion: The concept of marginal utility is only applicable in the case of discrete goods.
Reason: Marginal utility measures the additional satisfaction obtained from consuming an additional unit of a good.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: The assertion is false, but the reason is true.
Solution : The correct option is (d) Option D The assertion is false, but the reason is true.
The concept of marginal utility is not limited to only discrete goods. Marginal utility measures the additional satisfaction or utility obtained from consuming an additional unit of a good or service. It applies to both discrete goods, which are countable and measurable in units, as well as continuous goods, which are not countable or measurable in units.
For both discrete and continuous goods, the concept of marginal utility helps explain how the satisfaction or utility derived from consuming each additional unit changes. It provides insights into consumer behavior, decision-making, and demand.
Question : Assertion: A consumer maximizes utility by consuming goods until the marginal utility per unit of money spent is equal across all goods.
Reason: The consumer aims to allocate their budget in a way that maximizes their overall satisfaction.
Question : Assertion: The law of diminishing marginal utility states that as a consumer consumes more of a good, the additional satisfaction derived from each additional unit of the good decreases.
Reason: This occurs because the consumer's needs and wants for the good are
Question : Assertion (A): The demand curve shows the inverse relationship between the own price of a good and its quantity demanded. Reason (R): Law of diminishing marginal utility advocates that consumer gets lesser satisfaction for each additional unit consumed
Question : Assertion: The demand curve demonstrates the inverse relationship between a good's own price and the number of units sought. Reason: According to the law of diminishing marginal utility, consuming more units leads to lower consumer satisfaction.
Question : Assertion: The marginal rate of transformation (MRT) measures the opportunity cost of producing one additional unit of a good.
Reason: MRT reflects the production possibilities curve (PPC) slope and shows the trade-off between two goods.
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile