The typical pattern revealed in a budget constraint model shows that as the quantity consumed rises,
A) total utility rises, but marginal utility falls.
B) marginal utility increases.
C) total utility decreases, but marginal utility rises.
D) total utility decreases.

Question

Quizplus · Accepted Answer

The budget constraint model, which is a fundamental concept in microeconomics, illustrates how consumers allocate their income across different goods and services. As the quantity consumed of a good increases, the total utility (or total satisfaction) from consuming that good generally increases because the consumer is getting more of something they value. However, the marginal utility, which is the additional satisfaction gained from consuming one more unit of the good, tends to decrease. This is known as the law of diminishing marginal utility, which states that while total utility may continue to rise with increased consumption, the rate at which it rises (marginal utility) will fall.

The Typical Pattern Revealed in a Budget Constraint Model Shows