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Theory of consumer behaviour — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsTheory of consumer behaviour1 Mark
Question
Which of the following is not correct about consumer equilibrium through utility analysis?
  1. Law of Marginal Utility does not operate.
  2. Remains constant.
  3. _______ =.
  4. Consumer is rational.
✓

Answer

  1. Law of Marginal Utility does not operate.

Explanation:

Law of diminishing marginal utility operates which implies that marginal utility must decline as more of a commodity is consumed by consumer. So, the consumer compares its satisfaction with monetary payment for getting maximum satisfaction.

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