Which of the following statements is true with respect to utility theory?
A)The less you have of any one good, the less you would be willing to pay for one more unit of it.
B)The less you have of any one good, the more you would be willing to pay for one more unit of it.
C)The amount you have of any one good does not influence the price you would be willing to pay for it, but it does affect the marginal utility received from consuming a particular unit.
D)The higher the marginal utility received from consuming good X, the lower the marginal utility received from consuming good Y.

Question

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, as a consumer consumes more and more of a good, the marginal utility (satisfaction) from each additional unit decreases. Therefore, the less you have of any one good, the more you would be willing to pay for one more unit of it. This is because the additional unit would provide a higher level of satisfaction or utility compared to the previous units.

Which of the Following Statements Is True with Respect to Utility