Question

59. Diminishing marginal utility means that ... a) the more money a consumer spends, the less is available to purchase other goods. b) money should transferred from wealthy people to poor people. c) utility cannot be compared across different people. d) additional units of consumption produce less additional utility than previous units. e) utility always increases through additional consumption

Answer 1

Answer: option (d) is correct.

Explanation:

As consumer consumes more and more units of a commodity as a result the utility derived from each additional unit goes on diminishing is known as Diminishing marginal utility.

According to Diminishing marginal utility, consumer's utility decreases as the consumption increases and consumption of first unit gives them the highest level of satisfaction.