Riding her bike for one hour has given Aditi a utility of 7. If Aditi chooses to ride her bike for another hour, we can assume that:
A)she will receive a marginal utility of more than 7.
B)she will receive a marginal utility of 7.
C)she will receive a marginal utility of less than 7.
D)her total utility will fall because of diminishing utility.

Question

Quizplus · Accepted Answer

According to the principle of diminishing marginal utility, as a person increases consumption of a product while keeping consumption of other products constant, there is a decline in the marginal utility that person derives from consuming each additional unit of that product. Therefore, if Aditi chooses to ride her bike for another hour, the additional satisfaction (marginal utility) she gets from that second hour is likely to be less than the utility she received from the first hour.

Riding Her Bike for One Hour Has Given Aditi a Utility