While the marginal utility of increments from the status quo is considered to be _____________, the marginal utility of decrements below the status quo is _____________.
A) decreasing, increasing
B) increasing, decreasing
C) decreasing, constant

Question

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, as one consumes more of a good, the additional satisfaction or utility gained from each additional unit decreases. This means that as one moves away from the status quo (either incrementally or decrementally), the marginal utility will decrease. Therefore, the correct choice is A as the marginal utility of increments is decreasing and the marginal utility of decrements is increasing.

While the Marginal Utility of Increments from the Status Quo