Which of the following is true, according to the law of diminishing marginal utility?
A) The marginal utility of Diane's second Coke is greater than the marginal utility of her third pretzel, other things constant.
B) The marginal utility of Diane's second Coke is greater than the marginal utility of Ken's third pretzel, other things constant.
C) The marginal utility of Diane's second Coke is greater than the marginal utility of her third Coke, other things constant.
D) The total utility of two Cokes is greater than the total utility of three Cokes, other things constant.
E) The marginal utility of Diane's second Coke is greater than the marginal utility of Ken's third Coke, other things constant.

Question

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, as a consumer consumes more of a good, the additional satisfaction or utility obtained from each additional unit of the good decreases. Therefore, the marginal utility of Diane's second Coke will be greater than the marginal utility of her third Coke, as she will already have satisfied some of her thirst with the first and second Cokes. This option is the only one that correctly identifies the diminishing marginal utility principle. Option A is incorrect because it compares two different goods (Coke and pretzels). Option B is incorrect because it compares Diane's consumption to Ken's consumption. Option D is incorrect because it focuses on total utility rather than marginal utility. Option E is incorrect because it compares Diane's consumption to Ken's consumption.

Which of the Following Is True, According to the Law