Chapter 10, Problem 1P

To determine

To decide:

Whether Al has diminishing marginal utility by considering the situation given

Concept Introduction:

Utility: This is the benefit or satisfaction derived from the consumption of a good or service.

Marginal utility: This is the additional benefit or satisfaction derived from the consumption of an additional unit of a commodity or service.

Diminishing marginal utility: The diminishing marginal utility of economics says that if a person increases his consumption on a particular good while the consumption of other goods are at constant, it will result in a decrease of utility of that person if he consumes an extra additional unit of the particular commodity.