The law of diminishing marginal utility exists for the first four units of a good if they have marginal utilities of:
A) 1, 2, 4, 8.
B) 8, 4, 1, 2.
C) 4, 8, 2, 1.
D) 8, 4, 2, 1.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as an individual consumes more units of a good, the marginal utility (additional utility) of each additional unit decreases. In this case, the marginal utilities of the first four units are 8, 4, 2, and 1, which clearly show a decreasing pattern. Therefore, choice D is the best option.

The Law of Diminishing Marginal Utility Exists for the First