4 Views

Question : The law of diminishing marginal utility states that:

Option 1: Marginal utility increases as consumption increases

Option 2: Total utility decreases as consumption increases

Option 3: Marginal utility decreases as consumption increases

Option 4: Total utility remains constant as consumption increases


Team Careers360 11th Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: Marginal utility decreases as consumption increases


Solution : The correct answer is (c) Marginal utility decreases as consumption increases.

According to this law, as a consumer increases the consumption of a particular good or service while keeping the consumption of other goods constant, the additional utility or satisfaction derived from each additional unit of the good will diminish. In other words, the marginal utility of a good tends to decrease as more of it is consumed. This implies that each additional unit of a good provides less additional satisfaction than the previous unit, leading to a downward-sloping marginal utility curve.

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