According to the law of diminishing marginal utility in consumer behaviour, as the amount of a good consumed increases over time, the marginal utility or additional satisfaction derived from each extra unit of that good tends to ____.

Difficulty: Easy

Correct Answer: diminish

Explanation:


Introduction / Context:
The law of diminishing marginal utility is a fundamental concept in microeconomics and consumer behaviour. It is used to explain why demand curves slope downward and why consumers are willing to pay less for additional units of the same good. This question asks you to recall the basic statement of that law and to identify what happens to marginal utility as consumption of a good increases.


Given Data / Assumptions:
- A single consumer is consuming units of a particular good over a given period of time.
- Total consumption of the good is increasing, while other things such as tastes, income and prices of other goods remain constant.
- Marginal utility is defined as the additional satisfaction obtained from consuming one more unit of the good.


Concept / Approach:
The law of diminishing marginal utility states that as a consumer consumes more and more units of a good, the additional satisfaction from each extra unit tends to fall, beyond a certain point. The first unit of a good usually gives high utility because it satisfies the most urgent want. Later units satisfy less urgent wants and therefore yield lower additional satisfaction. This law does not say that total utility must fall, only that the marginal utility of successive units declines. So we must choose the option that captures this idea of a falling marginal utility as quantity increases.


Step-by-Step Solution:
Step 1: Examine option A, improve. If marginal utility improved or increased with each additional unit consumed, the consumer would get more and more extra satisfaction from later units, which contradicts the basic law and would lead to an upward sloping demand curve. So this option is inconsistent with standard theory.Step 2: Examine option B, diminish. This states that marginal utility decreases as consumption increases, which is exactly what the law of diminishing marginal utility says. It fits the textbook definition.Step 3: Examine option C, remain constant. If marginal utility stayed constant, each unit would give the same additional satisfaction, and there would be no particular reason for the demand curve to slope downwards with price. This contradicts observed consumer behaviour and standard models.Step 4: Examine option D, first diminish and then improve. The law of diminishing marginal utility does not describe such a pattern. It says that beyond a certain point marginal utility tends to decline and may eventually even become zero or negative, but it does not say that marginal utility later rises again as more units are consumed.


Verification / Alternative check:
You can verify your answer by thinking of a simple example, such as drinking glasses of water when you are thirsty. The first glass gives a lot of satisfaction, the second slightly less, and by the time you reach the fourth or fifth glass you may get very little extra satisfaction and might even feel discomfort if you are forced to drink more. This real life pattern illustrates diminishing marginal utility. Similar examples apply to many goods such as slices of pizza, cups of tea or the same movie watched repeatedly.


Why Other Options Are Wrong:
Option A is wrong because it suggests increasing marginal utility, which would mean each additional unit gives more extra satisfaction than the previous one. This would imply unrealistic ever rising willingness to pay. Option C is wrong because constant marginal utility is not consistent with downward sloping demand and the need to allocate limited income across many goods. Option D is wrong because the law does not include an improvement phase after diminishing; that idea would require a more complex and specific story, not the general law taught in elementary microeconomics.


Common Pitfalls:
One common confusion is between total utility and marginal utility. Total utility can still be rising even when marginal utility is falling, as long as marginal utility remains positive. Another error is to assume that diminishing marginal utility must occur immediately from the first unit. In reality the law says beyond a certain reasonable level of consumption, marginal utility tends to diminish. Understanding this distinction helps to apply the concept correctly to demand analysis and consumer choice problems.


Final Answer:
According to the law of diminishing marginal utility, the marginal utility of additional units of a good tends to diminish as the amount consumed increases.

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