New Enroll in our GIC Finance Online Course Here!

    Register

    Question

    Which goods are described by the law of diminishing

    marginal utility? 
    A Goods that increase in satisfaction with each additional unit consumed Correct Answer Incorrect Answer
    B Goods that provide less satisfaction with each additional unit consumed Correct Answer Incorrect Answer
    C Goods that exhibit increasing returns with more consumption Correct Answer Incorrect Answer
    D Goods that are unaffected by changes in consumption levels Correct Answer Incorrect Answer

    Solution

    The law of diminishing marginal utility states that as a person consumes more of a good, the additional satisfaction (utility) gained from each extra unit decreases.

    Practice Next