Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It increases the marginal utility.
B
It decreases the marginal utility.
C
It has no effect on the marginal utility.
D
It causes the marginal utility to fluctuate unpredictably.
Understanding the Answer
Let's break down why this is correct
Answer
Marginal analysis helps us understand how our choices affect our satisfaction, or utility, from consuming goods. When you consume more of a good, like pizza, the additional satisfaction you get from each extra slice usually decreases. This is because the first few slices might give you a lot of pleasure, but as you eat more, you start to feel full, and each additional slice brings less joy than the one before. So, the marginal utility, or the extra satisfaction from consuming one more unit, goes down as you consume more. This concept is important because it helps people make better decisions about how much of a good to consume based on their changing levels of satisfaction.
Detailed Explanation
When you consume more of a good, the extra satisfaction you get from each additional unit usually goes down. Other options are incorrect because Some might think that more consumption always means more satisfaction; This option suggests that more consumption has no impact on satisfaction.
Key Concepts
Marginal utility
Incremental decision-making
Topic
Marginal Analysis in Economics
Difficulty
medium level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.