The Concept of Diminishing Marginal Utility

question 49

Multiple Choice

The concept of diminishing marginal utility:

• A) explains why individuals rarely maximize their total utility.
• B) is the change in total utility that comes from consuming one additional unit of a good or service.
• C) is the principle that the additional utility gained from consuming successive units of a good or service tends to be smaller than the utility gained from the previous unit.
• D) is the principle that the additional utility gained from consuming different bundles of goods and services tend to be smaller than the utility gained from consuming just one bundle of goods and services.

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Definitions:

Cause-And-Effect

A relationship between events where one is the result of the other, often illustrated by a fishbone diagram in quality improvement contexts.

Quality Circles

A group of workers who voluntarily meet together on a regular basis to discuss and solve problems affecting the quality of their work, aiming to improve operations, reduce costs, and foster a more enjoyable work environment.

Group Planning

A collaborative approach to planning and decision-making processes, involving a group of individuals or teams to enhance outcomes and solutions.

Pareto Chart

A statistical tool used in decision making to identify the few critical causes (the "vital few") that are responsible for most effects or problems.