Which of the following best explains the Law of Diminishing Marginal Utility?
Marginal utility declines with each additional unit consumed
Marginal utility declines with each additional unit consumed is correct.
The Law of Diminishing Marginal Utility states that, other things remaining constant, as a consumer takes more and more units of a commodity, the extra satisfaction (marginal utility) from each successive unit keeps falling. For example, the first glass of water to a thirsty person gives great satisfaction, the second less and the fifth very little.
Total utility still rises as long as marginal utility is positive; it falls only once marginal utility becomes negative, so total utility does not simply decrease with consumption. Utility rising at an increasing rate is the opposite of the law, and marginal utility falls (not rises) while total utility rises.
Similar Questions
Iso-utility curve is another name for ______ curve.
Which of the following is NOT an exception to the 'Law of Demand'?
Which of the following is NOT an exception to the 'Law of Demand'?
Suppose a firm increases all inputs by 50% and its output increases by 75%. What type of return to scale is this?
Name the principle that states that as production increases, the cost per unit decreases?
What is the term for the situation where demand exceeds supply in a market?
Consider the following statements about market equilibrium:
Statement I: In equilibrium, the quantity that all firms wish to sell equals the quantity all consumers want to buy.
Statement II: Excess supply exists when the market demand is greater than the market supply.
Which of the above statements is/are correct?
Consider the following two statements about types of economies:
Statement I: In a centrally planned economy, the government takes all major decisions regarding production, exchange, and consumption of goods and services.
Statement II: In a market economy, economic activities are restricted to physical marketplaces where buyers and sellers must interact face-to-face.
Which of the above statements is/are correct?
Which curve in microeconomics shows the relationship between price and quantity demanded?
Important Questions from Microeconomics
Which of the following statement is correct?
I. Indifference curves are sloping from left to right.
II. Higher indifference curve gives a higher level of utility.
According to Ricardo what condition is necessary to make possible international trade between two countries?
Match List I with List II:
List- I
Shape of revenue curve of the firm
List – II
Market structure
A.
Kinked revenue-curve (I)
Monopolistic competition B.
Infinitely elastic straight line curve (II)
Perfect competition C.
Relatively less elastic curve (III)
Oligopoly D.
Relatively high elastic curve (IV)
Monopoly.
Choose the correct answer from the options given below -Marginal revenue of a firm is constant throughout under _________.
The cost curve which is a rectangular hyperbola is:
