Question

Assertion (A): Consumer is willing to sacrifice less and less units of a good to gain anadditional unit of the other good.
Reason (R): The utility that he gets from consuming an additional unit of a good goes ondiminishing.
a) Both A and R are true and R is thecorrect explanation of A.
b) Both A and R are true but R is not thecorrect explanation of A.
c) A is true but R is false. d) AisfalsebutRistrue.

Answer 1

Answer:

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Answer 2

The correct option is d). Assertion(A) is false but Reason(R) is true.

• The assertion says that the consumer is willing to sacrifice less and less units of a good to gain an additional unit of the other good is false because this statement violates the law of marginal rate of substitution.
• The law of marginal rate of substitution states that when the consumer wants to consume two commodities like X and Y so, in order to consume more units of Y, the consumer needs to sacrifice or let go of some units of X commodity so that the level of satisfaction remains the same.
• Therefore, in order to gain additional units of a good, the consumer needs to sacrifice more and more units of the other good. Hence, contradicting the Assertion statement.
• The reason(R) is true which says that the utility that a consumer gets from consuming an additional unit of a good goes on diminishing and its true because it follows the law of marginal utility.