If the first four units of a good consumed have marginal utilities of 60, 50, 40, and 30, respectively, this trend is an indication of the:
A) maximization of utility.
B) law of diminishing marginal utility.
C) law of consumer equilibrium.
D) minimization of utility.

Question

Quizplus · Accepted Answer

The decreasing marginal utility of the first four units consumed indicates the operation of the law of diminishing marginal utility, which states that the marginal utility of each additional unit of a good consumed decreases as the quantity consumed increases, holding other factors constant. The other choices are not applicable in this scenario.

If the First Four Units of a Good Consumed Have