[amp_mcq option1=”Law of diminishing MU” option2=”Law of Equi-MU” option3=”Law of demand” option4=”Satisfaction” correct=”option2″]<\/p>\n
The correct answer is: B. Law of Equi-MU.<\/p>\n
The law of substitution states that, as consumers consume more of one good, they will be willing to substitute other goods for it, and vice versa. This is because the marginal utility of a good decreases as consumers consume more of it. In other words, the more of a good a consumer has, the less satisfaction they will get from consuming an additional unit of that good.<\/p>\n
The law of equi-marginal utility states that consumers will maximize their satisfaction by consuming goods in such a way that the marginal utility of each good is equal. This means that consumers will consume more of goods that have a high marginal utility and less of goods that have a low marginal utility.<\/p>\n
The law of demand states that, as the price of a good decreases, consumers will demand more of it. This is because consumers are willing to purchase more of a good when it is cheaper.<\/p>\n
The law of satisfaction states that consumers will always be trying to maximize their satisfaction. This means that they will always be trying to consume goods in such a way that they get the most satisfaction possible.<\/p>\n
In conclusion, the law of substitution is another name for the law of equi-marginal utility. This law states that consumers will maximize their satisfaction by consuming goods in such a way that the marginal utility of each good is equal.<\/p>\n","protected":false},"excerpt":{"rendered":"
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