Question : As per law of DMU the marginal utility from each commodity keeps on
Option 1: begins to increase
Option 2: remains constant
Option 3: begins to decrease
Option 4: becomes zero
Correct Answer: begins to decrease
Solution : The correct answer is (c) begins to decrease
According to the law of diminishing marginal utility (DMU), the marginal utility from each commodity begins to decrease as more units of the commodity are consumed.
The law of diminishing marginal utility states that as a consumer consumes more and more units of a commodity, the additional satisfaction or utility derived from each additional unit diminishes. In other words, the consumer experiences diminishing marginal utility.
Question : The law of diminishing marginal utility states that:
Option 1: Marginal utility increases as consumption increases
Option 2: Total utility decreases as consumption increases
Option 3: Marginal utility decreases as consumption increases
Option 4: Total utility remains constant as consumption increases
Question : What is the First Law of Gossen?
Option 1: Law of Equi-marginal utility
Option 2: Law of Diminishing marginal utility
Option 3: Law of supply
Option 4: Law of demand
Question : According to the law of diminishing marginal utility, as a consumer consumes more of a good:
Option 1: The total utility derived from the good increases at a decreasing rate.
Option 2: The marginal utility derived from the good increases at a decreasing rate.
Option 3: The total utility derived from the good decreases at a decreasing rate.
Option 4: The marginal utility derived from the good decreases at a decreasing rate.
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