Diminishing marginal utility means that an increase in the consumption of a good leads to
A) a decrease in total utility.
B) a decrease in marginal utility.
C) a decrease in the fall of the price of the good.
D) a decrease in the consumer's budget.
E) an increase in the consumer's budget.

Question

Quizplus · Accepted Answer

Diminishing marginal utility is the principle that as a person consumes more of a good, the marginal (additional) utility they receive from each unit of the good decreases. This means that the increase in consumption leads to a decrease in marginal utility. The total utility may still increase, but at a decreasing rate due to diminishing marginal utility. Options C, D, and E are incorrect as they do not relate to the concept of diminishing marginal utility. Option A is partially true but not a complete explanation as the decrease in total utility is due to the decrease in marginal utility.

Diminishing Marginal Utility Means That an Increase in the Consumption