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Utility & Consumer's Equilibrium · Question 27 of 73

Question 27

EasyOriginal question

The law of diminishing marginal utility says that

Options for question 27

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. Each successive unit satisfies a want that is already partly met, so it adds less.

  2. TU keeps rising while MU is positive; it is MU that diminishes.

Worth noting

Total utility falls only after MU turns negative, not as soon as MU falls.

Concept
Law of diminishing marginal utility
Typical time
40 s
Your time
—
The rule this testsDiminishing marginal utility
Practise this chapter →

Ten questions from Utility & Consumer's Equilibrium, at your own pace.

Practise this chapter →

Ten questions from Utility & Consumer's Equilibrium, at your own pace.