Marginal utility is a. The extra satisfaction received from consuming one more u
ID: 1173898 • Letter: M
Question
Marginal utility is a. The extra satisfaction received from consuming one more unit of a good b. The change in total utility divided by the price of a good c. The total satisfaction received from consuming X amount of good A d. The consumer’s surplus divided by the change in total expenditures
True or False The demand for a product is likely to be inelastic if there are no good substitutes available.
True or False Consumers seek the most satisfaction they can get given their incomes and the prices of products.
Explanation / Answer
a) Marginal utility is "The extra satisfaction received from consuming one more unit of a good".
b) "True"
As the good doesn't have any close substitute the demand will be inelastic. For example, national security, no matter how costly it gets it has to be there because there is no substitute for the national security.
c) "True"
That is why a consumer will consume at the point where the consumption will be at at the budget line.