The Law of Diminishing Marginal Utility - SS2 Economics Past Questions and Answers - page 1
1
What does the law of diminishing marginal utility state?
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A
As a consumer consumes more units of a good or service, the additional satisfaction or happiness they derive from consuming each additional unit increases.
B
As a consumer consumes more units of a good or service, the additional satisfaction or happiness they derive from consuming each additional unit remains constant.
C
As a consumer consumes more units of a good or service, the additional satisfaction or happiness they derive from consuming each additional unit diminishes.
2
What is an example of the law of diminishing marginal utility?
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A
A person buying a new car.
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B
A person buying a new house.
C
A person eating pizza.
3
What is the relationship between the level of satisfaction and the number of units consumed according to the law of diminishing marginal utility?
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A
The level of satisfaction increases as the number of units consumed increases.
B
The level of satisfaction remains the same regardless of the number of units consumed.
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C
The level of satisfaction decreases as the number of units consumed increases.
4
Why is the law of diminishing marginal utility important in economics?
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