The general pattern that consumption of the first few units of any good tends to bring a higher level of utility to a person than consumption of later units is known as : A. Law of Diminishing Marginal Utility B. Marginal Analysis
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Step 1: The general pattern that consumption of the first few units of any good tends to bring a higher level of utility to a person than consumption of later units is known as the Law of Diminishing Marginal Utility. Show more…
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The law of diminishing marginal utility exists for the first four units of a good if they have marginal utilities of a. 1,2,4,8 b. 8,4,1,2 c. 4,8,2,1 d. 8,4,2,1
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In economics, total utility refers to the total satisfaction from consuming some commodity. According to the economist Samuelson: $^{14}$ As you consume more of the same good, the total (psychological) utility increases. However, $\ldots$ with successive new units of the good, your total utility will grow at a slower and slower rate because of a fundamental tendency for your psychological ability to appreciate more of the good to become less keen. (a) Sketch the total utility as a function of the number of units consumed. (b) In terms of derivatives, what is Samuelson saying?
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