Question

Marginal utility:

A. is equal to total utility divided by the number of units consumed.
B. is equal to total utility if the demand curve is linear.
C. increases as more of a product is consumed.
D. diminishes as more of a product is consumed.

Answer 1

Marginal utility D) diminishes as more of a product is consumed.

Step-by-step explanation:

Diminishing marginal utility is the correct answer. Marginal utility is the additional satisfaction or benefit that a consumer derives from consuming an additional unit of a product. However, as more of a product is consumed, the additional utility or satisfaction obtained from each additional unit diminishes. This means that each subsequent unit of a good consumed provides less additional utility than the previous units.

For example, if a person eats their first slice of pizza, they may find it very satisfying. However, as they consume more slices, the utility or satisfaction derived from each additional slice decreases. This is because the first slice satisfies their hunger, but subsequent slices may not be as enjoyable or satisfying.