Units of Quality Consumes Total Utility Marginal Utility 0 1 2 3 4 5 - 10 15 17 18 18 - 10 5 2 1 0 This table illustrates the law of _________

Analyze the question

The table shows units of a good consumed, the total utility (TU) gained, and the marginal utility (MU), which is the extra satisfaction from each additional unit.

| Units | Total Utility | Marginal Utility | |-------|---------------|------------------| | 0 | 0 | - | | 1 | 10 | 10 | | 2 | 15 | 5 | | 3 | 17 | 2 | | 4 | 18 | 1 | | 5 | 18 | 0 |

Explain the concept

The law of diminishing marginal utility states that as a consumer consumes more units of a good, the additional satisfaction (marginal utility) from each extra unit falls, assuming other things remain equal.

Step-by-step solution

1. Calculate MU as the change in TU: 10 − 0 = 10, 15 − 10 = 5, 17 − 15 = 2, 18 − 17 = 1, 18 − 18 = 0.
2. The MU column falls steadily: 10 → 5 → 2 → 1 → 0.
3. Total utility still rises, but at a decreasing rate, and then flattens at 18.

Checking the options

• A. Increasing returns: this is a production concept, where output rises faster than input. It is not relevant here.
• B. Diminishing returns: this is also a production concept, about falling marginal product of a variable input. It is not about utility.
• C. Diminishing marginal utility: MU falls with each additional unit consumed. This matches the table.
• D. Increasing total utility: TU does increase at first, but it stops at 18, and the table is mainly showing the falling MU pattern.

Answer: C. Diminishing marginal utility

Tip: In economics questions, if you see "utility" and a falling MU column, the answer is diminishing marginal utility. If you see "output", "input" or "factors of production", think diminishing returns. The words in the table tell you which law is being tested.