Commerce Exam  >  Commerce Questions  >  Non satiety means that the marginal utility o... Start Learning for Free
Non satiety means that the marginal utility of a commodity never turns to be negative??true of false?
Verified Answer
Non satiety means that the marginal utility of a commodity never turns...
This is an assumption of IC which implies that the consumer has not reached the point of saturation in the consumption of any good. Thus, he always prefers to have more of both commodities. He always tries to move to a higher indifference curve to get higher and higher satisfaction.So it is correct that MU never turns -ve since more consumption means more TU.
This question is part of UPSC exam. View all Commerce courses
Most Upvoted Answer
Non satiety means that the marginal utility of a commodity never turns...
Non satiety refers to the concept in economics that the marginal utility of a commodity never becomes negative. In order to understand whether this statement is true or false, it is important to first define marginal utility and then explore the concept of non satiety in detail.

Marginal Utility:
Marginal utility refers to the additional utility or satisfaction that a consumer derives from consuming an additional unit of a good or service. It is the change in total utility resulting from the consumption of one more unit of a commodity.

Non Satiety:
Non satiety, also known as the assumption of insatiability, is an assumption made in economics that individuals always desire more of a commodity. It implies that there is never a point where a consumer reaches complete satisfaction or satiety, and therefore the marginal utility of a commodity never becomes negative.

Understanding the Concept:
The concept of non satiety is based on the assumption that individuals have unlimited wants and desires, and thus, their utility from consuming additional units of a commodity never diminishes. This implies that the marginal utility of a commodity always remains positive or at least zero.

If the marginal utility of a commodity were to turn negative, it would imply that consuming an additional unit of the commodity reduces the consumer's total utility or satisfaction. However, this contradicts the concept of rational behavior, as individuals are assumed to always seek to maximize their utility.

Implications of Non Satiety:
The assumption of non satiety has several implications in economics. It helps in explaining why individuals continue to consume more of a commodity as long as it is available. It also justifies the law of demand, which states that as the quantity of a commodity consumed increases, the marginal utility derived from each additional unit decreases.

Non satiety also plays a crucial role in the theory of consumer behavior and the determination of consumer equilibrium. It helps in understanding the trade-offs that individuals make when allocating their limited resources among different goods and services.

Conclusion:
In conclusion, the statement that non satiety means the marginal utility of a commodity never turns to be negative is true. The assumption of non satiety is based on the idea that individuals always desire more of a commodity, and therefore, the marginal utility of a commodity never becomes negative. This assumption is fundamental in understanding consumer behavior and the determination of consumer equilibrium.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
Explore Courses for Commerce exam

Similar Commerce Doubts

Read the following passage and answer the questions that follows:In economics, rationing is an artificial restriction of demand and is done to keep price below the equilibrium (market-clearing) price determined by the process of supply and demand in an unfettered market. Thus, rationing can be complementary to price controls which can be explained through indifference curve approach.There are two kinds of rationing done by the government to reduce consumption—price rationing and non-price rationing. By rationing, we mean exercise tax and by non-price rationing, we mean all types of control on the quantity consumed. Non-price rationing could be done by giving away coupons that would enable low income families to obtain some goods at affordable prices, which could not be possible if the prices were to increase alone. With coupon schemes, it would develop a black market for coupons, which would paradoxically increase the utility for those who are in need of that commodity by collection of more of these coupons from those who are not in need. This ensures greater marginal utility for those people who are in need of the commodity and will provide exchange of money to those who sell these coupons. For this, it is necessary for the government to encourage trading of the coupons.The major importance of introducing rationing is to keep the price of important commodities under control, as for a necessary commodity, there will be an excessive demand in the market which will drive their price up in the market and high prices leads to reduction of consumption and utility for those who could not afford it. This ensures that the resources are planned in favour of the poor people of the country and restricts the rich people to ensure excessive purchase of limited resources of the country. This ensures development and equality of welfare and utilitybetween the rich and the poor people. Rationing of the good is done by the government and not the private sector. There is the same limit put on every person on the budget spending to which people could buy the commodities and within the limit, one could buy any amount of the commodity.Q. The marginal utility of a person diminishes.

Read the following passage and answer the questions that follows:In economics, rationing is an artificial restriction of demand and is done to keep price below the equilibrium (market-clearing) price determined by the process of supply and demand in an unfettered market. Thus, rationing can be complementary to price controls which can be explained through indifference curve approach.There are two kinds of rationing done by the government to reduce consumption—price rationing and non-price rationing. By rationing, we mean exercise tax and by non-price rationing, we mean all types of control on the quantity consumed. Non-price rationing could be done by giving away coupons that would enable low income families to obtain some goods at affordable prices, which could not be possible if the prices were to increase alone. With coupon schemes, it would develop a black market for coupons, which would paradoxically increase the utility for those who are in need of that commodity by collection of more of these coupons from those who are not in need. This ensures greater marginal utility for those people who are in need of the commodity and will provide exchange of money to those who sell these coupons. For this, it is necessary for the government to encourage trading of the coupons.The major importance of introducing rationing is to keep the price of important commodities under control, as for a necessary commodity, there will be an excessive demand in the market which will drive their price up in the market and high prices leads to reduction of consumption and utility for those who could not afford it. This ensures that the resources are planned in favour of the poor people of the country and restricts the rich people to ensure excessive purchase of limited resources of the country. This ensures development and equality of welfare and utilitybetween the rich and the poor people. Rationing of the good is done by the government and not the private sector. There is the same limit put on every person on the budget spending to which people could buy the commodities and within the limit, one could buy any amount of the commodity.Q. ______ means the utility derived from the total number of products consumed (choose the correct alternativ e).

Read the following passage and answer the questions that follows:In economics, rationing is an artificial restriction of demand and is done to keep price below the equilibrium (market-clearing) price determined by the process of supply and demand in an unfettered market. Thus, rationing can be complementary to price controls which can be explained through indifference curve approach.There are two kinds of rationing done by the government to reduce consumption—price rationing and non-price rationing. By rationing, we mean exercise tax and by non-price rationing, we mean all types of control on the quantity consumed. Non-price rationing could be done by giving away coupons that would enable low income families to obtain some goods at affordable prices, which could not be possible if the prices were to increase alone. With coupon schemes, it would develop a black market for coupons, which would paradoxically increase the utility for those who are in need of that commodity by collection of more of these coupons from those who are not in need. This ensures greater marginal utility for those people who are in need of the commodity and will provide exchange of money to those who sell these coupons. For this, it is necessary for the government to encourage trading of the coupons.The major importance of introducing rationing is to keep the price of important commodities under control, as for a necessary commodity, there will be an excessive demand in the market which will drive their price up in the market and high prices leads to reduction of consumption and utility for those who could not afford it. This ensures that the resources are planned in favour of the poor people of the country and restricts the rich people to ensure excessive purchase of limited resources of the country. This ensures development and equality of welfare and utilitybetween the rich and the poor people. Rationing of the good is done by the government and not the private sector. There is the same limit put on every person on the budget spending to which people could buy the commodities and within the limit, one could buy any amount of the commodity.Q. The marginal utility derived from a commodity keeps on ..................... .

Top Courses for Commerce

Non satiety means that the marginal utility of a commodity never turns to be negative??true of false?
Question Description
Non satiety means that the marginal utility of a commodity never turns to be negative??true of false? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Non satiety means that the marginal utility of a commodity never turns to be negative??true of false? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Non satiety means that the marginal utility of a commodity never turns to be negative??true of false?.
Solutions for Non satiety means that the marginal utility of a commodity never turns to be negative??true of false? in English & in Hindi are available as part of our courses for Commerce. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Non satiety means that the marginal utility of a commodity never turns to be negative??true of false? defined & explained in the simplest way possible. Besides giving the explanation of Non satiety means that the marginal utility of a commodity never turns to be negative??true of false?, a detailed solution for Non satiety means that the marginal utility of a commodity never turns to be negative??true of false? has been provided alongside types of Non satiety means that the marginal utility of a commodity never turns to be negative??true of false? theory, EduRev gives you an ample number of questions to practice Non satiety means that the marginal utility of a commodity never turns to be negative??true of false? tests, examples and also practice Commerce tests.
Explore Courses for Commerce exam

Top Courses for Commerce

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev