Final answer:
The consumption of most goods and services is governed by the law of diminishing marginal utility, which states that additional consumption yields gradually less satisfaction. Consumer behavior is also influenced by marginal analysis and the limitations set by their opportunity set, especially in response to income changes affecting demand for normal goods.
Step-by-step explanation:
The consumption of most goods and services is subject to the law of diminishing marginal utility. This economic principle states that as an individual consumes more of a particular good or service, the satisfaction or utility gained from each additional unit decreases. Consequently, people and societies tend to diversify their consumption rather than focusing on a single good or service. This behavior is influenced by both the marginal analysis of deciding how much more or less to consume and the limitations of an individual's opportunity set, which is contingent on their income and the prices of goods.
According to the chapter on Demand and Supply and the chapter on Elasticity, normal goods are those for which demand increases with an increase in income and falls with a decrease in income. Therefore, as income rises, individuals typically consume more. Conversely, when income falls, the typical reaction is to consume less of both goods.