Question

1. As we move downward along a demand curve for apples,

consumer well-being decreases.

the marginal utility of apples decreases.

the marginal utility of apples increases.

Both A and B are true.

Both A and C are true.

Answer 1

The demand curve represent the maximum willingness to pay for the goods at different quantity of goods consumption. The consumer will be willing to pay for good according to the marginal utility which he derived by consuming a particular quantity of goods.

Hence it can be said that as a consumer move downward along a demand curve for apples, the marginal utility of apples decrease, therefore he consumes less quantity of apples as price decrease.

Hence option second is the correct answer.