Question

Assume a consumer is currently purchasing services and goods. If the amount of satisfaction one gains from services decreases, what will likely happen to the marginal utilities of services and goods?a. The marginal utility of services will fall and then begin to increase as the consumer decreases consumption.b. The marginal utility of services will fall and then decrease further as the consumer decreases consumption.c. The marginal utility of services will increase and then increase further as the consumer decreases consumption.d. The marginal utility of services will increase and then decrease as the consumer decreases consumption.

Answer 1

Answer:

b. The marginal utility of services will fall and then decrease further as the consumer decreases consumption.

Explanation:

Marginal utility is the satisfaction from each additional unit of goods or services consumed.

Now, since the marginal utility will decrease because the satisfaction from services has decreased, and accordingly the marginal satisfaction will decrease even in case the consumption is decreased.

As there will be no satisfaction, also it is not provided that the sources will now be used to take the goods, which can increase the marginal utility.

Therefore, if talking about only the marginal utility of services it will decrease, with time, and with decrease in consumption.