Question

Assuming that diminishing marginal utility applies to both goods, if a consumer buys more plastic bins and fewer door hooks, the _____ utility of plastic bins will _____, and the _____ utility of door hooks will_______

a. marginal; fall; marginal; fall
b. marginal; rise; total; rise
c. marginal; fall; marginal; rise
d. total; fall; marginal; rise

Answer 1

C. marginal; fall; marginal; rise

Assuming that diminishing marginal utility applies to both goods, if a consumer buys more plastic bins and fewer door hooks, the MARGINAL utility of plastic bins will FALL (DECREASE), and the MARGINAL utility of door hooks will RISE (INCREASE).

Step-by-step explanation:

According to the law of diminishing marginal utility, the more goods or services that you acquire from a certain product X, the utility of consuming that extra unit of good X will be smaller every time. I.e. the more you consume of good X, the less utility you will obtain from consuming it. E.g. you might enjoy a slice of pizza, but if you keep eating, the utility of having the fifth slice will be much lower than the utility from consuming the first one.