The principle of diminishing marginal utility says that A. total utility increases by smaller and smaller amounts as the quantity of the good consumed increases. B. total utility increases by larger and larger amounts as the quantity of the good consumed increases. C. marginal utility is negative as the quantity of the good consumed increases. D. total utility decreases as the quantity of the good consumed increases.

The principle of diminishing marginal utility says that A. total utility increases by smaller and smaller amounts as the quantity of the good consumed increases. B. total utility increases by larger and larger amounts as the quantity of the good consumed increases. C. marginal utility is negative as the quantity of the good consumed increases. D. total utility decreases as the quantity of the good consumed increases.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 3SQP

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Law of Diminishing Marginal UtilityIndicate whether each of the following statements is true or false. Explain why.A.The law of diminishing marginal utility states that as an individual increases consumption of a given product within a set period of time, the utility gained from consumption eventually declines.B.Marginal utility measures the added satisfaction derived from a one-unit increase in consumption, holding consumption of other goods and services constant.C.When goods are relatively scarce, the law of diminishing marginal utility means that the added value of another unit of goods will be small in relation to the added value of another unit of services.D.The law of diminishing marginal utility gives rise to a downward-sloping demand curve for all goods and services.