Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Read the following statements -
Assertion (A) and Reasoning (R):
Assertion: Usually, it is seen that the marginal utility increases with increase in consumption of the commodity.
Reasoning: Having obtained some amount of the commodity, the desire of the consumer to have still more of it becomes weaker.
From the given alternatives choose the correct one:

Options:

Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reasoning (R) is false.

Assertion (A) is false but Reasoning (R) is true.

Correct Answer:

Assertion (A) is false but Reasoning (R) is true.

Explanation:

Assertion is wrong but the reasoning is true because usually, it is seen that the marginal utility DIMINISHES with increase in consumption of the commodity due to "Law of diminishing marginal utility". Law of diminishing marginal utility states that marginal utility from consuming each additional unit of a commodity declines as its consumption increases. This happens because having obtained some amount of the commodity, the desire of the consumer to have still more of it becomes weaker.