Micro

Consumer Behaviour

Medium

Which one of the following statements is most suitable to the law of diminishing marginal utility?

MU remain more than zero at all consumption level.

Marginal utility (MU) becomes zero at a level when total utility (TU) maximum and remain constant.

The marginal utility increases with increase in consumption of the commodity.

Marginal utility falls but remains positive at all consumption level.

✅ Correct Option: 2

Under the law of diminishing marginal utility, MU falls as consumption increases, becomes zero at the point where total utility is maximum (the point of satiety), and turns negative thereafter. Option 2 captures this correctly. Options 1 and 4 wrongly claim MU always stays positive, and option 3 contradicts the law.

2026: 12 May Shift 1

If the income effect is stronger than the substitution effect, the demand for the good would be positively related to its price. Such a good is called?

2023: 20 June Shift 1

Arrange the following of elasticities of demand in increasing order as per geometric method.

A. Mid-Point of the demand curve

B. Intercept on Y-axis

C. Between Mid-Point and intercept on X-axis

D. Between Mid-Point and intercept on Y-axis

E. Intercept on X-axis

Choose the correct answer from the options given below:

2026: 21 May Shift 2

The expenditure on the good would change in the opposite direction as the price change if and only if the percentage change in quantity is greater than the percentage change in price, then the elasticity of good is:

2023: 30 May Shift 1

A good that is considered to be inferior to a consumer, may be observed as normal good to the another consumer. This is due to

2025: 3 June Shift 1

Increase in the income of buyers (in case of inferior goods) will cause _________

2025: 29 May Shift 1

Arrange the following stages of Consumer's Equilibrium in the correct sequence under the utility analysis

(A) Marginal Utility becomes equal to the price of a commodity

(B) Marginal utility, derived from a commodity X is greater than Px

(D) The consumer reallocates expenditure to maximize satisfaction.

Choose the correct answer from the options given below:

Which one of the following statements is most suitable to the law of diminishing marginal utility?

Solution

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