Bissoy.com
Doctors Medicines MCQs Q&A

According to the law of diminishing marginal utility, as the amount of a good consumed increases, the marginal utility of that good tends to

According to the law of diminishing marginal utility, as the amount of a good consumed increases, the marginal utility of that good tends to Correct Answer diminish

Economists use the concept of marginal utility to measure happiness and pleasure and how that affects consumer decision making. They have also identified the law of diminishing marginal utility, which means that the first unit of consumption of a good or service has more utility than the next units of consumption.Hence, the marginal utility of the good diminishes as the amount of good consumed increases.

Related Questions

Which of the following are not the assumptions related to the theory of consumer behaviour as per the cardinal utility approach?
1. Rational consumer
2. Unlimited money income
3. Utility cardinally measurable
4. Diminishing marginal utility of money
5. Constant marginal utility of commodities
6. Maximisation of satisfaction
7. Utility is additive
The electricity bill of a certain establishment is partly fixed and partly varies with the number of units of electricity consumed. In a certain month when 540 units are consumed, the bill is Rs. 1,800. In another month the consumed units are 620 and the bill is Rs. 2,040. If 500 units of electricity is consumed in a month, the bill for that month is
Put into chronological order on the basis of development:
1. Law of demand
2. Law of indifference
3. Law of diminishing marginal utility
4. Revealed preference curve
5. Indifference curve
The pie chart given below shows the amount spent by a boy on the purchase of six different items. The total amount spent on all these six items is Rs. 54000. The amount spent on a specific item is represented as a degree with reference to the total amount spent on all these six items. Which of the following statement(s) is/are correct? I. The amount spent on article A is Rs.900 less than the amount spent on article B. II. The amount spent on article C is Rs 2400 more than the amount spent on article D. III. The ratio of the amount spent on article B to the amount spent on article E is 4 : 1.
Suppose that there are two goods, X and Y, facing a consumer. The prices are Px = Rs. 4 and Py = Rs. 5. He has Rs. 110 to spend on these goods. Suppose, he is currently buying 15 units of good X (with marginal utility equal to 40) and 10 units of good Y (with marginal utility equal to 45).
In the above context, which one of the following statements is correct?
When labour is plotted on X-axis and capital is plotted on Y-axis and an iso-quant is prepared, then which of the following statements is/are false ? (a) Marginal rate of technical substitution of labour for capital is equal to the slope of the iso-quant. (b) Marginal rate of technical substitution of labour for capital is equal to change in the units of capital divided by the change in the units of labour. (c) Marginal rate of technical substitution of labour for capital is the ratio of marginal productivity of capital to marginal productivity of labour.
When labour is plotted on X-axis and capital is plotted on Y-axis and an isoquant is prepared, then which of the following statement(s) is/arefalse?
1. Marginal rate of technical substitution of labour for capital is equal to the slope of the iso-quant.
2. Marginal rate of technical substitution of labour for capital is equal to change in the units of capital divided by the change in the units of labour.
3. Marginal rate of technical substitution of labour for capital is the ratio of marginal productivity of capital to marginal productivity of labour.
Good 'Y' is the substitute for good 'X' if
1. A fall in the price of good X leads to the fall in the marginal utility of good Y.
2. A fall in the price of good X leads to the fall in the quantity purchased of good Y. Select the correct answer
On which of the following assumptions, the theory of consumer behaviour on cardinal utility approach is NOT based?  1. Consumer is rational 2. Limited money income of the consumer 3. Maximization of total satisfaction 4. Diminishing marginal utility of money 
According to the law of diminishing marginal utility,