Johnny spends his day doing a variety of activities; he spends the morning exercising and doing yard work,reads in the afternoon,and hosts a dinner party in the evening.Economists would say his choice to do a variety of activities instead of spending all of his time on one activity illustrates the concept of:
A) tastes and preferences
B) budget constraints
C) diminishing marginal utility
D) income effect

Question

Quizplus · Accepted Answer

The concept being illustrated here is diminishing marginal utility, which states that as one consumes more and more of a good or service, the added satisfaction or benefit received from each additional unit of that good or service decreases. By doing a variety of activities, Johnny is spreading out his consumption of different goods (in this case, leisure activities) and thus avoiding the diminishing marginal utility that would result from consuming too much of any one activity.

Johnny Spends His Day Doing a Variety of Activities; He