1.Diminishing marginal utility refers to the fact that

a. demand declines as income falls.
b. additional satisfaction declines as additional units of an item are consumed.
c. people have unlimited needs.
d. in equilibrium, supply equals demand.

2. Generally, the more substitutes there are for a good, the
a. more elastic the demand. c. more complements there are.
b. less valuable it is. d. less prices change.
1.A 2 A.

Is it b?

1. B, 2. A

1. B, 2. A

Correct

To get the answer to question 1, we need to understand the concept of diminishing marginal utility. Diminishing marginal utility refers to the fact that additional satisfaction or usefulness of a good or service tends to decrease as more of it is consumed. This implies that as a person consumes more units of a good, the additional satisfaction or utility derived from each additional unit decreases.

Therefore, we can conclude that the correct answer to question 1 is:

b. additional satisfaction declines as additional units of an item are consumed.

To get the answer to question 2, we need to understand the relationship between substitutes and the elasticity of demand. Elasticity of demand refers to how responsive the quantity demanded of a good is to changes in price.

When there are more substitutes available for a good, consumers have more options to choose from. This means that if the price of one good increases, consumers can easily switch to a substitute, reducing the demand for the original good. On the other hand, if the price of a good with few substitutes increases, consumers have less ability to switch to alternatives, and therefore the demand for the original good is less affected.

As a result, we can conclude that the correct answer to question 2 is:

a. more elastic the demand.