Diminishing marginal utility is best illustrated by which of the following statements?
A) A decrease in the price of hot dogs will cause consumers to buy more hot dogs, because the lowered price has increased their effective real income.
B) A person will receive less satisfaction from consuming four hot dogs than from consuming three hot dogs.
C) A person will receive less added satisfaction from consuming a fourth hot dog in a week than from consuming the third hot dog in a week.
D) If the price of hot dogs declines, people's tastes for hot dogs will increase.

Question

Quizplus · Accepted Answer

Diminishing marginal utility suggests that as a person consumes more of a particular good, the additional satisfaction or utility they receive from each additional unit consumed will eventually decrease. Choice C best illustrates this concept as it specifically references a decrease in added satisfaction from consuming a fourth unit of a good compared to the third unit. Choices A and D may be related to changes in demand or quantity demanded, but do not directly address the concept of diminishing marginal utility. Choice B only provides an example without any context or comparison to other units consumed.

Diminishing Marginal Utility Is Best Illustrated by Which of the Following