What does the term "diminishing marginal utility" mean?
A. The more you have of something, the more you want it
B. The value of each extra unit of a good increases
C. Each extra unit gives less satisfaction than the one before
D. Utility always stays the same
Answer (1)
The correct answer is letter C. Diminishing marginal utility means that as you consume more of something, each additional unit gives less satisfaction. For example, the second slice of pizza is less satisfying than the first.
