If consumption exhibits diminishing marginal utility,then:
A)utility can never be equal to zero.
B)the utility function is downward sloping.
C)additional units of consumption after some threshold make you worse off.
D)more consumption leads to declining utility.
E)additional units of consumption raises utility by smaller and smaller amounts.

Question

Quizplus · Accepted Answer

Diminishing marginal utility means that each additional unit of consumption provides less additional utility than the previous unit. This implies that the marginal utility curve is downward-sloping, and that additional units of consumption raise utility by smaller and smaller amounts. In other words, more consumption leads to declining marginal utility. It does not necessarily mean that utility can never be equal to zero, nor that additional units after some threshold make you worse off (although it is possible that a point of negative marginal utility could be reached eventually).

If Consumption Exhibits Diminishing Marginal Utility,then