The law of diminishing marginal utility
A)is valid only after basic necessities (such as food and shelter)have been obtained
B)says that marginal utility decreases as more of a good is consumed
C)implies that spending on a good will decrease as more of that good is consumed
D)says that marginal utility decreases as income increases
E)implies that spending on a good decreases as income increases

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as more units of a good are consumed, the additional satisfaction or utility derived from each additional unit will eventually decrease. This applies to all goods, including basic necessities. Therefore, choice A is incorrect. Additionally, the law does not necessarily imply a decrease in spending on a good as more of it is consumed, so choices C and E are incorrect. Finally, the law is not related to income, so choices D is incorrect.

The Law of Diminishing Marginal Utility