What does the law of diminishing marginal utility posit?
A) As a person consumes decreasing quantities of a given good, the pleasure she derives from it increases.
B) As a person consumes increasing quantities of a given good, he must produce more to afford it.
C) As a person consumes increasing quantities of a given good until he is satisfied.
D) As a person consumes increasing quantities of a given good, the pleasure she derives from it increases, but at a decreasing rate.
E) Over time, and through experience, people learn what quantities of a given good give them the greatest pleasure.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility posits that as a person consumes increasing quantities of a given good, the pleasure she derives from it increases, but at a decreasing rate. In other words, each additional unit of the good gives less satisfaction compared to the previous units consumed. This is because the individual's needs and wants become increasingly satisfied as she consumes more of the good, and eventually reaches satiety where additional units do not provide any additional benefit.

What Does the Law of Diminishing Marginal Utility Posit