/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q.7 Would you expect the marginal ut... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 6: Q.7 (page 152)

Would you expect the marginal utility to rise or fall with the additional consumption of a good? Why?

Short Answer

Expert verified

Yes, marginal utility falls with each additional unit of consumption.

Step by step solution

01

Step 1:Definition

In economics, total utility and marginal utility are concepts under utility that assist determine a consumer's level of satisfaction. The total utility refers to the whole amount of pleasure derived by a customer from the consumption of a specific amount of products. Marginal utility, on the other hand, refers to the additional utility gained by a consumer from the consumption of one additional unit of the good.

02

Explanation

According to the law of declining marginal utility, the price a customer is ready to pay for a good is determined by its marginal utility, which decreases with each additional unit of consumption.

The concept of diminishing pricing is intimately related to the law of diminishing marginal utility. Consumers are willing to pay lesser dollar amounts for more of a thing when its utility diminishes as its usage increases.

03

Step 3:Conclusion

Since this is due to the fact that each unit of consumed goods creates less additional utility.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Maude鈥檚 labor-supply curve slopes upward if, for Maude,

  1. leisure is a normal good

  2. consumption is a normal good

  3. the income effect on leisure exceeds the substitution effect.

  4. the substitution effect on leisure exceeds the income effect.

As a college student you work at a part-time job, but your parents also send you a monthly 鈥渁llowance.鈥� Suppose one month your parents forgot to send the check. Show graphically how your budget constraint is affected. Assuming you only buy normal goods, what would happen to your purchases of goods?

Explain all the reasons why a decrease in a product's price would lead to an increase in purchases

At two points on an indifference curve,

a. the consumer has the same income.

b. the consumer has the same marginal rate of substitution.

c. the bundle of the goods cost the consumer the same amount.

d. the bundle of goods that yield the consumer same satisfaction.

Marge buys pizza for \(10 and Pepsi for \)2. She has income of \(200. Her budget constraint will experience a parallel outward shift if.

a. the price of pizza falls to \)5, the price of Pepsi falls to \(1 and her income falls to 100.

b. the price of pizza rises to \)20, the price of Pepsi rises to \(4 and her income remains the same.

c. the price of pizza falls to \)8, the price of Pepsi falls to \(1 and her income rises to \)240.

d. the price of pizza rises to 20, the price of Pepsi rises to \(4 and her income rises to \)500.
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.