Post Utme Abu 2018 Commerce Question 26

Practice objective / multiple choice question 26 from the 2018 Post Utme Abu Commerce examination.

Post Utme Abu 2018 Commerce Objective / Multiple Choice
Question 26 POST_UTME_ABU • 2018 • COMMERCE • objective

In a perfectly competitive market, the law of diminishing marginal utility implies that as the quantity of a good consumed increases, the marginal utility derived from each additional unit of the good will eventually decrease. However, this does not necessarily mean that the total utility derived from the good will also decrease. Explain why.

Answer Options

A. The total utility derived from the good will always decrease as the quantity consumed increases.
Correct Answer B. The total utility derived from the good will increase as the quantity consumed increases, but at a decreasing rate.
C. The total utility derived from the good will remain constant as the quantity consumed increases.
D. The total utility derived from the good will decrease as the quantity consumed increases, but only if the good is a luxury good.
Correct Answer
B
Correct Option:
The total utility derived from the good will increase as the quantity consumed increases, but at a decreasing rate.

About This Question

This is Post Utme Abu 2018 Commerce Question 26. It is one of the objective questions from the 2018 Post Utme Abu Commerce examination.

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