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Law of Diminishing Marginal Utility Quiz
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Law of Diminishing Marginal Utility Quiz

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Questions and Answers

What does the Law of Diminishing Marginal Utility state?

  • As a consumer consumes more units of a specific product, the marginal utility remains constant.
  • As a consumer consumes more units of a specific product, the additional utility from each additional unit decreases. (correct)
  • As a consumer consumes more units of a specific product, the total utility decreases.
  • As a consumer consumes more units of a specific product, the total utility increases at a decreasing rate.

    • How does the Law of Diminishing Marginal Utility relate to consumption?

  • It helps in understanding how consumer preferences change over time.
  • It explains how consumption patterns can lead to overspending.
  • It explains why consumers tend to consume more of a product when its price increases.
  • It describes the relationship between the consumption of a good and the satisfaction derived from it. (correct)

    • What impact does the Law of Diminishing Marginal Utility have on pricing and demand?

  • It supports the concept of price discrimination based on consumer satisfaction.
  • It results in an increase in demand as the marginal utility decreases.
  • It explains why demand decreases as prices decrease for certain goods. (correct)
  • It leads to higher prices for goods with high marginal utility.

    • True or false: The Law of Diminishing Marginal Utility states that as a person consumes more of a good or service, the additional satisfaction or utility from each additional unit decreases?

    <p>True</p> Signup and view all the answers

    True or false: The Law of Diminishing Marginal Utility applies only to goods and not services?

    <p>False</p> Signup and view all the answers

    True or false: The Law of Diminishing Marginal Utility is a fundamental concept in economics that helps explain consumer behavior?

    <p>True</p> Signup and view all the answers

    The Law of Diminishing Marginal Utility states that as a person consumes more of a good or service, the additional satisfaction or utility from each additional unit ______

    <p>decreases</p> Signup and view all the answers

    The Law of Diminishing Marginal Utility is a fundamental concept in ______ that helps explain consumer behavior

    <p>economics</p> Signup and view all the answers

    The Law of Diminishing Marginal Utility applies not only to goods, but also to ______

    <p>services</p> Signup and view all the answers

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