The law of diminishing marginal utility can be stated as follows:
A)As the amount of a good consumed increases, the sum (total)of satisfaction received tends to decrease at a constant rate.
B)As the amount of a good consumed increases, the additional satisfaction gained from consuming additional units tends to decrease.
C)As the amount of a good consumed decreases, the additional satisfaction gained from consuming additional units tends to increase.
D)As the amount of a good consumed increases, the sum (total)of satisfaction received tends to decrease at a diminishing rate.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as the amount of a good consumed increases, the additional satisfaction gained from consuming additional units tends to decrease. Therefore, option B is the best choice. Option A is incorrect because it suggests a constant rate of decrease, which is not true. Option C is incorrect as it contradicts the law of diminishing marginal utility. Option D is also incorrect as it suggests a diminishing rate of decrease in total satisfaction, which is not consistent with the law.

The Law of Diminishing Marginal Utility Can Be Stated as Follows