Question 9
Theory of Consumer BehaviourUnits of Quantity Consumed | Total Utility | Marginal Utility
0 | --- | ---
1 | 10 | 10
2 | 15 | 5
3 | 17 | 2
4 | 18 | 1
5 | 18 | 0
The table above illustrates the law of
- A.diminishing marginal utility
- B.diminishing marginal productivity
- C.diminishing returns
- D.increasing returns
- E.increasing total utility.
Show the answer and explanation
Answer: A (diminishing marginal utility)
Explanation
Each extra unit consumed adds less satisfaction than the one before (10, 5, 2, 1, 0): diminishing marginal utility.