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Question
State with reason whether you agree or disagree with the following statement
Marginal utility curve slopes downwards.
Solution
I agree with the given statement.
Reason:
- There is an inverse relation between the stock of a commodity and its marginal utility.
- As the stock of a commodity goes on increasing, the MU decreases.
- Law of DMU states that “other things being equal, the additional benefit which a person derives from the increase in the stock of a thing diminishes with every increase in the stock that he already has”
- In diagram, it can be observed that as the units of commodity goes on increasing, the MU diminishes and eventually goes down to zero. In fact, when more is consumed after the point of satiety, the MU becomes negative.
Thus, the MU curve slopes downward from left to right.
RELATED QUESTIONS
Explain with reason whether you ‘agree’ or ‘disagree’ with the following statement:
The law of 'diminishing marginal utility' is important in the practice?
Explain any four exceptions of the law of Diminishing marginal utility.
In the law of diminishing marginal utility, Alfred Marshall assumes that the marginal utility of money ______.
As per the law of diminishing marginal utility, the measurement of utility is assumed to be _____.
When MU is falling, TU is _______.
Exceptions to the law of diminishing marginal utility:
- Cardinal measurement
- Hobbies
- Miser
- Money
Criticisms to the law of diminishing marginal utility:
- Based on unrealistic assumptions
- Not applicable to indivisible and bulky goods
- The law is restricted to satisfaction of a single want.
- In reality, cardinal measurement of utility not possible.
Find the odd word
Exception to law of Diminishing Marginal Utility -
Assertion (A): MU curve slopes upwards.
Reasoning (R): MU goes on diminishing with every successive increase in the consumption of a commodity.
State with reason whether you agree or disagree with the following statement:
There are no exceptions to the law of diminishing marginal utility.
State with reasons whether you agree or disagree with the following statement.
There are no exceptions to the law of diminishing marginal utility.
