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The law of diminishing marginal utility suggests that:

A. Total utility will be negative.

B. Additional units of consumption will add less to total utility.

C. Consumers wants are insatiable.

D. Most consumers will limit their consumption even then they earn high incomes.

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Divya Singh
Divya SinghLv10
6 Oct 2020

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Related questions

The "law" of diminishing marginal utility implies that the (A) marginal utility of a good diminishes over time. (B) first unit of a good consumed will contribute most to the consumer's satisfaction (C) last unit of a good consumed will contribute most to the consumer's satisfaction. (D) total utility is negative. (E) total utility is constant as more units are consumed. Answer:

1. If marginal utility is negative, total utility is

a. Positive

b. Negative

c. Decreasing

d. Constant

e. Increasing

2. If utility-maximizing consumers face identical prices, they will have identical

a. Marginal utilities for each good

b. Ratio of marginal utilities for each good

c. Preferences

d. Ratios of total utilities for each good

e. Total utilities for each good

3. The substitution effect

a. Always increases quantity demanded of a good whose relative price has fallen

b. Is opposite in sign to the income effect for all normal goods

c. Is opposite in sign to the income effect for all normal goods

d. May cause demand curves to be upward sloping

e. Is always dominated by the income effect for normal goods

4. Demand curves for normal goods slope downward because

a. The substitution effect of a price change is greater than the income effect

b. Substitution and income effects work in the same direction

c. The income effect is always greater than the substitution effect

d. The income effect is always less than the substitution effect

e. None of the above

5. The idea that a consumer derives less additional satisfaction from consuming successive units of a good is called

a. Diminishing consumer surplus

b. The paradox of value

c. Diminishing marginal utility

d. Diminishing total value of consumption

e. Diminishing total utility

The law of diminishing marginal utility suggests that:

A. People are willing to pay more for a good the less of it they have.

B. People will substitute lower-priced goods for more expensive goods, ceteris paribus.

C. Price and quantity demanded are directly related.

D. As marginal utility decreases, the willingness to pay increases.

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