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JAMB Economics 1979 Question 49

Question 49

Theory of Consumer Behaviour

In most cases, the marginal utility derived from a particular good

  1. A.increases as additional units are consumed
  2. B.increases at a decreasing rate as additional units are consumed
  3. C.decreases at a constant rate as additional units are consumed
  4. D.decreases as additional units are consumed
  5. E.remains constant as additional units are consumed.
Show the answer and explanation

Answer: D (decreases as additional units are consumed)

Explanation

The law of diminishing marginal utility says each extra unit consumed gives less satisfaction than the one before.