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Suppose Jon likes to eat both pizza and hamburgers. As John consumes more pizza and holds steady his consumption of hamburgers, the marginal utility of a piece of pizza ________ and the marginal utility of a hamburger _______.
a) increases, is unchanged
b) increases, increases
c) decreases: decreases
d) decreases: is unchanged

Respuesta :

Answer:

decrease : is unchanged

Explanation:

Suppose Jon likes to eat both the pizza and hamburgers . As John consumes more pizza and holds steady his consumption to hamburgers , the marginal utility of a piece of pizza decreases and the marginal utility of a hamburger is unchanged .

Here the law of diminishing marginal utility is apply .

Law of marginal utility states that as a person consumes more and more unit of a commodity , then marginal utility derived from every additional unit must be decline or decrease .

Here John is consuming more and more pieces of pizza so marginal utility or pizza is decreasing.

Law of diminishing marginal utility has some assumption they are :

  • A good quantity should be consumed
  • The consumption of the commodity should be continuous.

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