Question

When the Economics Department serves all-you-can-eat ice cream at its annual spring student-recruiting event, you eat three ice cream cones. You really enjoy the first, the second is just okay, and the third is tasteless.

a) Law of diminishing marginal utility
b) Elasticity of demand
c) Perfect competition
d) Consumer surplus

Answer 1

The subject of this question is the law of diminishing marginal utility, which explains how the happiness or satisfaction one derives from consuming additional units of a good or service decreases as the quantity consumed increases.

Step-by-step explanation:

The subject of this question is the law of diminishing marginal utility.

The law of diminishing marginal utility is the principle that explains how the happiness or satisfaction one derives from consuming additional units of a good or service decreases as the quantity consumed increases. In this case, when you eat three ice cream cones, you enjoy the first one the most, the second one less, and the third one is tasteless.

This concept is important in Economics, as it helps explain consumer behavior and the demand for goods and services.