Don receives 100 utils from consuming two oranges. The utility he derives from consuming the second orange equals 30 utils. The information provided
A)is consistent with the law of diminishing marginal utility.
B)is inconsistent with the law of diminishing marginal utility.
C)is sufficient to determine the quantity of oranges Don will consume.
D)lends support to the inferiority of oranges as consumer goods.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as a person consumes more of a good, the additional (marginal) utility from each additional unit of the good decreases. Since Don receives less utility (30 utils) from the second orange compared to the total utility from two oranges (100 utils), it implies the first orange provided him with more utility than the second, consistent with the law of diminishing marginal utility.

Don Receives 100 Utils from Consuming Two Oranges