**Understanding Economic Choices: Exploring Key Concepts**---### The Concept of Marginal UtilityThe **law of _______________________** explains why people and societies rarely make all-or-nothing choices. This concept is fundamental in understanding economic behavior, as it describes how individuals and groups make decisions incrementally, weighing the additional benefits and costs of each decision.**Question**: Fill in the blank to complete the law and select the correct explanation.- ⃝ diminishing marginal utility- ⃝ utility- ⃝ marginal analysis- ⃝ consumption**Explanation**:In economics, understanding how and why decisions are made involves recognizing that choices are not usually black-and-white. Individuals often evaluate the incremental benefits versus costs of their actions, leading to more nuanced decision-making processes. This key concept can notably influence various fields from personal finance to public policy. To grasp this better, consider how a person decides on consuming multiple units of a product. The benefit or satisfaction gained from each additional unit often decreases, leading to a less straightforward, all-or-nothing decision-making path.Explore further to understand how this principle affects economic decisions at both the individual and societal levels.

Answered: The law of explains why people and…

Business

Economics

The law of explains why people and societies rarely make all-or-nothing choices. diminishing marginal utility utility

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: A rational consumer would want as much as many goods as possible to maximize utility derived from…

A: Utility refers to the satisfaction or enjoyment a consumer can get from a service or good.

Q: What are the conditions for utility maximization?

A: Utility refers to the satisfaction that a consumer gets from consumption of a good or service. It…

Q: A negative marginal utility implies that the consumer has reached a point of satiation.

A: Total utility, in economics, is defined as the total amount of satisfaction which a consumer…

Q: Total utility is 0 when marginal utility is 0 True/False

A: # Utility is a concept which helps us calculate the satisfaction a consumer gets when a good or…

Q: Q- Marginal utility can never be negative. True/False

A: Total utility is the total satisfaction that a consumer derives when he consumes goods and services.…

Q: Vhen consumers have a budget, their utility is maximized by buying a combination of goods such hat…

A: A rational consumer seeks to maximize the utility received in spending his or her income in such a…

Q: Evaluate the one specific law which states that the marginal utility of a good or service declines…

A: The additional pleasure or advantage that a consumer receives from consuming one more unit of an…

Q: What economic concept determines when you should stop eating wings?

A: Introduction Utility as a concept is widely used to theorize many of the popular economic concepts.…

Q: Show how the budget constraint affects utility maximization.

A: Answer: Introduction: A consumer maximizes his/her utility by choosing the bundle of goods that…

Q: The marginal utility derived from the consumption of extra unit of commodity. True/False

A: Utility in economics refers to the pleasure or usefulness that a person gets from consuming a good…

Q: True/False Marginal utility refers to the satisfaction or pleasure that occur due to the…

A: The satisfaction or pleasure that a person experiences after using a good or service is referred to…

Q: Imagine there is an outbreak of 'mad sheep' disease, which wipes out a considerable portion of the…

A: a) Two factors occur when the price of haggis rises that will influence how many (units) of haggis…

Q: A consumer finds only three products, X, Y, and Z, are for sale. The amount of utility which their…

A: Utility maximization formula: MUxPx=MUyPy=MUzPz, where, MUx is the marginal utility of good X, Px is…

Q: The marginal utility of the last unit of apples consumed is 12, and the marginal utility of the last…

A: Marginal utility is the utility derived by the consuming 1 additional unit of good.

Q: The daily total utility per quantity of consumption is shown in the figure. This shows that the…

A: The additional satisfaction a client gets from possessing one additional unit of associate item or…

Q: True/False Marginal utility keeps falling with the each additional consumption of a good or…

A: Economists uses the concept of marginal utility to determine how much of a product consumers are…

Q: Frank is purchasing products C and D in utility-maximizing amounts. If the price of C is $6 and the…

A: Given: Frank is making purchases of products C and D in profit maximizing amounts. Price of C=$6…

Q: Hector has a budget for bottled water and soda pop. If the price of soda pop decreases, Hector will…

A: Indifference curve shows the combination of two goods which give a consumer same level of…

Q: utility positive? Explain. 3. Suppose Mary is in consumer equilibrium. The marginal utility of good…

A: The state where an individual gets the most value or satisfaction from the goods and services…

Q: Use the principle of rational choice to determine which one to choose: a) Paying for Squid Game from…

A: Rational choice theory refers to the theory that individuals depend on rational calculations to make…

Q: Suppose a consumer's utility function is given by U(X,Y) XY. Also, the consumer has $720 to spend.…

Q: If the marginal utility from consuming the fifth unit of a product is 6 and the total utility from…

A: The total enjoyment obtained from the consumption of an item or service is referred to as utility in…

Q: erry spends $ 10 a month on pet dispensers and uperman action figures. His marginal-…

A: Marginal Utility alludes to extra utility by virtue of the utilization of an extra unit of a…

Q: According to behavioral economics research, in which of the following cases would we expect a person…

A: Behavioral economics refers to the studies of the effects of psychological, emotional, cultural,…

Q: utility maximisation

A: The usefulness or enjoyment that a consumer can derive from a service or good is referred to as…

Q: True or false. Maximizing choices occur when combinations of two goods are made such that they are…

A: An indifference curve is a contour line with the same utility at all points along the line. A line…

Q: The utility of a good or service Multiple Choice O O O is synonymous with usefulness. is the…

A: Consumer theory is referred to the study of how an individual decides on spending their wealth on…

Q: Utility equals satisfaction true or false

A: The concept of utility is used to analyse consumers' tastes.

Q: Describe the point at which a consumer maximizes utility.

A: A rational consumer is going to be in equilibrium when his utility is maximized within a given…

Q: Compare and contrast the choice based and preference based approache

A: Two methods for moving toward the dynamic interaction: Preference based methodology Choice based…

Q: Consumer value can be determined by how consumer utility compares between different items. Comment

A: In a market, utility refers to the economic concept to explains the value of a good for a specific…

Q: If marginal utility is less than the price, the consumer will

A: Marginal utility: It is the satisfaction that a consumer gets from having one more unit of a good or…

Q: What is meant by form utility?

A: Utility is an economic term which refers to satisfaction.

Q: The concept of diminishing marginal utility says that the satisfaction level of human beings drop as…

A: The principle in question examines the economic theory of marginal utility, which addresses how the…

Question

**Understanding Economic Choices: Exploring Key Concepts**

---

### The Concept of Marginal Utility

The **law of _______________________** explains why people and societies rarely make all-or-nothing choices. This concept is fundamental in understanding economic behavior, as it describes how individuals and groups make decisions incrementally, weighing the additional benefits and costs of each decision.

**Question**: Fill in the blank to complete the law and select the correct explanation.

- ⃝ diminishing marginal utility
- ⃝ utility
- ⃝ marginal analysis
- ⃝ consumption

**Explanation**:

In economics, understanding how and why decisions are made involves recognizing that choices are not usually black-and-white. Individuals often evaluate the incremental benefits versus costs of their actions, leading to more nuanced decision-making processes. This key concept can notably influence various fields from personal finance to public policy.

To grasp this better, consider how a person decides on consuming multiple units of a product. The benefit or satisfaction gained from each additional unit often decreases, leading to a less straightforward, all-or-nothing decision-making path.

Explore further to understand how this principle affects economic decisions at both the individual and societal levels.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Answer

VIEW

Explanation

VIEW

Conclusion

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Examples of form utility?
How can one's choice of purchases/consumption be infuenced by utility or marginal utility?
1
Utility comparisons can be made between two individuals, providing the same good or service is being compared. True or False?
It is not always easy to distinguish between wants and needs. Among the sentences below, choose the one that WILL NOT help us to distinguish between wants and needs. * Unsubscribing from promotional emails, breaking our online shopping habits and skiping through TV commercials. Thinking that we will feel embarassed if our stuff is olf or out-of-date. Going for the less expensive versions of the thing we need (such as cell phones, clothing, and vehicles). Determining the true cost of our purchases (for example, adding to the cost price of a car, the insurance premium, the maintenance and repairs cost and the cost of the gasoline).
The Law of Diminishing Marginal Utility is just a theory that has no application to everyday life. None of us behaves as if we were subject to this law. True or False? Explain.
Optimal consumption refers to Multiple Choice the mix of products that maximizes total utility for the limited amount of income consumers have to spend. the total number of products that maximizes total utility for consumers. the maximum total utility a consumer receives by the consumption of one more item. the amount demanded that will create the strongest economy.
You like candy and cake. After using your entire $30 budget at the sugar store, you find that the marginal utility from the last candy you consumed was 60 and the last piece of cake was 30. Assuming you have maximized your utility and the price of a piece of candy is $4, calculate the price of cake? Do not enter dollar signs. Answer:
With the aid of a diagram, describe a corner solution and explain the axioms of consumer choice.
Mike is pondering what to do for a few free hours on Saturday evening. This is the set of activities he's considering, along with their respective utility levels: activity build a LEGO set go stargazing south of Dexter Lake play a tabletop game with his kids watch a movie with his family prepare Mini-Exam 2 for EC 201 utility 6 utils 9 utils 7 utils 10 utils 2 utils Unfortunately, Mike has only enough time to do at most one of these activities. What is Mike's opportunity cost of deciding to watch a movie with his family?
Marginal utility can also become negative True/False