According to the law of diminishing utility ?
Correct answer: D. Total utility will rise at a falling rate as more units are consumed
- A. Utility is at a maximum with the first unit
- B. Increasing units of consumption increase the marginal utility
- C. Marginal product will fall as more units are consumed
- D. Total utility will rise at a falling rate as more units are consumed
Explanation
With diminishing marginal utility, each additional unit adds less utility than the previous one, so total utility continues to rise at a falling rate while marginal utility remains positive. Marginal product concerns production, not consumption utility.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
An increase in income should ?
An increase in price all other things unchanged leads to ?
If a product is an inferior good ?
A fall in price ?
When the market operates without interference, price increases will distribute what is available to those who are willing and able to pay the most. This process is known as ?
If the cross-price elasticity of demand between two goods is negative, then the two goods are ?