As a consumer moves downward to the right on an indifference curve, she is willing to give up less of the other good because of
A) increasing marginal utility.
B) constant opportunity costs.
C) decreasing elasticity.
D) diminishing marginal utility.

Question

Quizplus · Accepted Answer

Diminishing marginal utility means that as a consumer consumes more of one good, the additional satisfaction (utility) gained from consuming an additional unit of that good decreases. Therefore, as a consumer moves down an indifference curve, trading off one good for another, they are willing to give up less of the other good because the marginal utility of the good they are getting more of is decreasing.

As a Consumer Moves Downward to the Right on an Indifference