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प्रश्न
Explain the meaning of diminishing marginal rate of substitution with the help of an example.
Explain with the help of a numerical example, the meaning of diminishing the marginal rate of substitution
उत्तर
A diminishing marginal rate of substitution:-
The marginal rate of substitution means the rate at which the consumer is willing to substitute one commodity for the other commodity. MRS falls because of the law of diminishing the marginal utility.
Law of diminishing marginal utility means that as more units of a good are consumed, the marginal utility received from the consumption of every additional unit of the good declines.
| Units of Commodity X |
Total Utility (TU) (utils) |
Marginal Utility (MU) MUn = TUn − TUn-1 (utils) |
| 1 | 50 | 50 − 0 = 50 |
| 2 | 80 | 80 − 50 = 30 |
| 3 | 100 | 100 − 80 = 20 |
| 4 | 110 | 110 − 100 = 10 |
| 5 | 110 | 110 − 110 = 0 |
| 6 | 105 | 105 − 110 = −5 |
In the given schedule, the marginal utility of the second unit is 30 utils and it decreases to 20 and 10 for the consumption of the 3rd and 4th unit of the marginal utility, respectively. It becomes zero for the consumption of the 5th unit, and it becomes negative for the 6th unit. Hence, the marginal utility will decrease with additional units of consumption.
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संबंधित प्रश्न
The law of diminishing marginal utility can be explained with the help of schedule and diagram.
Explain the law of diminishing marginal utility.
Explain the law of diminishing marginal utility with the help of a total utility schedule.
Explain with reasons, whether you agree or disagree with the following statement
The law of 'diminishing marginal utility' is important in practice.
What is the behaviour of Total Variable Cost, as output increases?
Define or explain the following concept :
Marginal utility.
Assumption to the Law of diminishing Marginal util.
Exceptions to the Law of diminishing Marginal Util.
State the following statement is True or False:
The law of diminishing marginal utility explains economic behaviour of a rational consumer.
State the following statement is True or False:
Negative MU denotes more satisfaction.
Answer in detail :
State and explain the law of Diminishing Marginal Utility. Explain its assumptions.
State with reason whether you agree or disagree:
Law of Diminishing Marginal utility is important in practice.
State with reason whether you agree or disagree:
There are no real exceptions to the law of Diminishing Marginal Utility.
Answer the following question.
What is meant by "diminishing returns to a factor"? Discuss any two reasons for the operation of diminishing returns to a factor.
