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Questions and Answers
What does negative marginal utility imply?
What does negative marginal utility imply?
In the context of cardinal utility, what does the law of diminishing marginal utility postulate?
In the context of cardinal utility, what does the law of diminishing marginal utility postulate?
What does positive marginal utility indicate?
What does positive marginal utility indicate?
When does the satisfaction level start to decrease while consuming a good or service?
When does the satisfaction level start to decrease while consuming a good or service?
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What does the term 'marginal utility' describe in economics?
What does the term 'marginal utility' describe in economics?
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Study Notes
Marginal Utility
- Negative marginal utility implies a decrease in overall satisfaction from consuming another unit of a good or service.
- The law of diminishing marginal utility postulates that the additional utility derived from consuming one more unit of a good or service decreases as the quantity consumed increases.
- Positive marginal utility indicates an increase in overall satisfaction from consuming another unit of a good or service.
- The satisfaction level starts to decrease while consuming a good or service when the marginal utility becomes negative.
- Marginal utility in economics describes the additional satisfaction (utility) derived from consuming one more unit of a good or service.
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Description
Test your understanding of marginal utility in economics with this quiz. Explore the concept of how the satisfaction derived from consuming additional units of a good or service changes. Evaluate your knowledge of positive, negative, and zero marginal utility through practical examples.
