Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
As a consumer consumes more of a good, the additional satisfaction from each additional unit decreases.
B
A consumer will always prefer to consume more of a good regardless of its cost.
C
Consumers will never stop consuming a good until they have exhausted all resources.
D
The satisfaction gained from the first unit of a good is always greater than the satisfaction from any subsequent units.
Understanding the Answer
Let's break down why this is correct
Answer
The principle of diminishing marginal utility says that as a person consumes more of a good or service, the extra satisfaction or "utility" they get from each additional unit decreases. For example, think about eating slices of pizza. The first slice may bring you a lot of joy because you are very hungry, but by the third or fourth slice, you might not enjoy it as much because you are getting full. This idea affects how consumers make choices because they will weigh the satisfaction they get from each additional item against its cost. Therefore, people might choose to stop buying more of something when the extra satisfaction no longer feels worth the price.
Detailed Explanation
As you eat more slices of pizza, each slice gives you less happiness than the one before. Other options are incorrect because Some people think that more is always better; This idea suggests you will never stop eating.
Key Concepts
Diminishing marginal utility
Topic
Marginal Utility and Consumer Choice
Difficulty
easy level question
Cognitive Level
understand
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