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State with reason if the following statements are true or false: (i) At a grand family get-together party you go on eating and eating since you have not a pay. (ii) As we consume more units of a commodity , our total Utility from its consumption keeps falling. |
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Answer» Solution :False : For free goods , a CONSUMER will limit his Consumer will limit his consumption of a commodity to a POINT where the point of full satisfaction is reached . Consumption beyond this point will only generate DISUTILITY . False : As we CONSUME more units of a commodity , it.s marginal utility keeps on diminishing. Total Utility keeps on rising , but at a diminishing rate till marginal utility become zero. |
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