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According to Marshall, the law of diminishing marginal utility applies on ___________?
- a)All commodities except money
- b)Bank money
- c)Money in the same manner as it applies on the commodity
- d)Cash but not on bank money
Correct answer is option 'A'. Can you explain this answer?
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According to Marshall, the law of diminishing marginal utility applies...
The law of diminishing marginal utility states that with the consumption of every successive unit of commodity yields marginal utility with a diminishing rate. However, there are certain things on which the law of diminishing marginal utility does not apply.
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According to Marshall, the law of diminishing marginal utility applies...
Law of Diminishing Marginal Utility and its Application on Money
The law of diminishing marginal utility states that as a person consumes more and more units of a commodity, the utility or satisfaction derived from each additional unit decreases. This law applies to all commodities except money.
Explanation:
• All commodities except money: Money is a unique commodity that does not follow the law of diminishing marginal utility. The more money a person has, the more utility or satisfaction he/she derives from it. This is because money is a means to acquire goods and services that provide utility, and the more money a person has, the more goods and services he/she can acquire.
• Bank money: Bank money refers to the money that is deposited in banks and can be withdrawn by the depositor on demand. Bank money can be considered as a form of money and hence, it does not follow the law of diminishing marginal utility.
• Money in the same manner as it applies on the commodity: The law of diminishing marginal utility applies to all commodities except money. Therefore, it cannot be applied to money in the same manner as it applies to other commodities.
• Cash but not on bank money: Cash is a physical form of money that can be used to purchase goods and services. The law of diminishing marginal utility applies to cash, but not to bank money.
In conclusion, the law of diminishing marginal utility does not apply to money, including bank money. Money is a unique commodity that does not follow the same pattern as other commodities in terms of satisfaction derived from each additional unit.
The law of diminishing marginal utility states that as a person consumes more and more units of a commodity, the utility or satisfaction derived from each additional unit decreases. This law applies to all commodities except money.
Explanation:
• All commodities except money: Money is a unique commodity that does not follow the law of diminishing marginal utility. The more money a person has, the more utility or satisfaction he/she derives from it. This is because money is a means to acquire goods and services that provide utility, and the more money a person has, the more goods and services he/she can acquire.
• Bank money: Bank money refers to the money that is deposited in banks and can be withdrawn by the depositor on demand. Bank money can be considered as a form of money and hence, it does not follow the law of diminishing marginal utility.
• Money in the same manner as it applies on the commodity: The law of diminishing marginal utility applies to all commodities except money. Therefore, it cannot be applied to money in the same manner as it applies to other commodities.
• Cash but not on bank money: Cash is a physical form of money that can be used to purchase goods and services. The law of diminishing marginal utility applies to cash, but not to bank money.
In conclusion, the law of diminishing marginal utility does not apply to money, including bank money. Money is a unique commodity that does not follow the same pattern as other commodities in terms of satisfaction derived from each additional unit.
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According to Marshall, the law of diminishing marginal utility applies...
All commodities except money
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According to Marshall, the law of diminishing marginal utility applies on ___________?a)All commodities except moneyb)Bank moneyc)Money in the same manner as it applies on the commodityd)Cash but not on bank moneyCorrect answer is option 'A'. Can you explain this answer?
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