The table given below depicts the total utility derived from the consumption of a good.Table 7.1

-In the theory of utility, it is assumed that marginal utility:
A)increases as the consumption of a product increases.
B)is always zero irrespective of any increase or decrease in consumption.
C)remains constant when consumption of a product increases.
D)diminishes as the consumption of a product increases.
E)remains constant when the consumption of a product decreases.

Question

The table given below depicts the total utility derived from the consumption of a good.Table 7.1
 
-In the theory of utility, it is assumed that marginal utility:
A)increases as the consumption of a product increases. 
B)is always zero irrespective of any increase or decrease in consumption. 
C)remains constant when consumption of a product increases. 
D)diminishes as the consumption of a product increases. 
E)remains constant when the consumption of a product decreases.

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, as the consumption of a product increases, the additional utility obtained from each additional unit consumed decreases. This means that marginal utility diminishes as the consumption of a product increases, making option D the correct choice. Options A and C are incorrect because they suggest that marginal utility increases or remains constant as consumption increases, which is not true. Option B is also incorrect because it suggests marginal utility is always zero, which is not necessarily true. Option E is incorrect because it suggests that marginal utility remains constant when consumption decreases, which is also not true.

The Table Given Below Depicts the Total Utility Derived from the Consumption