Because of diminishing marginal utility, the benefit of consuming more of a good:Multiple choice question.falls with each additional unit, so the price consumers are willing and able to pay falls with increased consumption.falls with each additional unit, so the price consumers are willing and able to pay increases with increased consumption.increases with each additional unit, so the price consumers are willing and able to pay falls with increased consumption.increases with each additional unit, so the price consumers are willing and able to pay increases with increased consumption.
Question
Because of diminishing marginal utility, the benefit of consuming more of a good:Multiple choice question.falls with each additional unit, so the price consumers are willing and able to pay falls with increased consumption.falls with each additional unit, so the price consumers are willing and able to pay increases with increased consumption.increases with each additional unit, so the price consumers are willing and able to pay falls with increased consumption.increases with each additional unit, so the price consumers are willing and able to pay increases with increased consumption.
Solution
The correct answer is: "falls with each additional unit, so the price consumers are willing and able to pay falls with increased consumption."
This is because the law of diminishing marginal utility states that as a person increases consumption of a product while keeping consumption of other products constant, there is a decline in the marginal utility that person derives from consuming each additional unit of that product. Therefore, consumers are willing to pay less for each additional unit of the same product.
Similar Questions
The law of diminishing marginal utility suggests that:Question 12Select one:a.As an individual consumes more of a good, the additional utility associated with each additional unit of that good remains constant.b.As an individual consumes less of a good, the additional utility associated with each additional unit of that good decreases.c.As an individual consumes more of a good, the additional utility associated with each additional unit of that good increases.d.As an individual consumes more of a good, the additional utility associated with each additional unit of that good decreases.e.Consumer utility is a upward sloping curve.Clear my choice
A consumer with a limited income will maximize utility when each good is purchased in amounts such that theMultiple Choicetotal utility is the same for each good in a bundle.marginal utility of each good in a bundle is maximized.marginal utility per dollar spent on each of the final choices in a bundle is equal.marginal utility per dollar spent on each of the final choices in a bundle is maximized for each good.
For a consumer, the marginal utility of good A is 25 and its price is $5. The marginal utility of good B is 60 and its price is $12. The consumer has allocated his entire budget. Is this consumer maximizing his total utility? Explain your answer
A person should consume that precise amount of something when its marginal (1 Point)cost is less than its marginal benefit.benefit equals its marginal cost.benefit is positive.cost exceeds its marginal benefit.
When a person consumes two goods (A and B), that person's utility is maximized when the budget is allocated such that:Group of answer choicesthe marginal utility of A equals the marginal utility of B.the marginal utility of A times the price of A equals the marginal utility of B times the price of Bthe ratio of total utility of A to the price of A equals the ratio of the marginal utility of B to the price of B.the ratio of the marginal utility of A to the price of A equals the ratio of the marginal utility of B to the price of B.
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