When Bonnie increases the consumption of Good A and decrease the consumption of Good B, her marginal utility of
A) A falls and the marginal utility of B will increase.
B) both A and B will decrease.
C) A increases and the marginal utility of B will fall.
D) both A and B will increase.

Question

Quizplus · Accepted Answer

When Bonnie increases consumption of Good A, the marginal utility of A typically falls due to the law of diminishing marginal utility. Conversely, as she decreases consumption of Good B, the marginal utility of B is likely to increase.

When Bonnie Increases the Consumption of Good a and Decrease