Asked by Tesha Cherry on Jun 10, 2024

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When a consumer shifts purchases from product X to product Y, the marginal utility of

A) X falls and the marginal utility of Y rises.
B) X rises and the marginal utility of Y falls.
C) both X and Y rises.
D) both X and Y falls.

Marginal Utility

The additional satisfaction or benefit a consumer gains from consuming one more unit of a good or service.

Purchases Shift

A change in the buying behavior of consumers, often referring to a movement in demand for goods or services in the market.

Utility Change

refers to changes in the level of satisfaction or happiness that a consumer derives from consuming goods or services, indicating shifts in preferences or economic circumstances.

  • Identify the significance of diminishing marginal utility in the decisions of consumers.
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KG
Kenneth GarciaJun 17, 2024
Final Answer :
B
Explanation :
When a consumer shifts purchases from product X to product Y, it implies that the last unit of X consumed was providing less satisfaction compared to what the consumer now expects to gain from Y. Therefore, the marginal utility of X rises because the consumer is consuming less of X, making each unit of X more valuable. Conversely, the marginal utility of Y falls because the consumer is consuming more of Y, making each additional unit of Y less valuable.