If the first four units of a good consumed have marginal utilities of 8, 4, 2, and 1, respectively, this trend is an indication of the:
A) law of consumer equilibrium.
B) law of diminishing marginal utility.
C) law of diminishing consumer surplus.
D) law of supply.

Question

Quizplus · Accepted Answer

The decreasing marginal utility of the first four units indicates the operation of the law of diminishing marginal utility, which states that the additional satisfaction (or marginal utility) a consumer derives from consuming successive units of a good decreases as more and more units of the good are consumed.

If the First Four Units of a Good Consumed Have