Which is the First law of Gossen?

By: Prof. Dr. Fazal Rehman | Last updated: February 3, 2024

Question:  Which is the First law of Gossen?

A   Law of demand

B   Law of diminishing marginal utility

C  Law of equi-marginal utility

D  Consumers surplus

Answer: Law of diminishing marginal Utility

Concept         Description
Law of Diminishing Marginal Utility ·        The Law of Diminishing Marginal Utility is also known as the First law of Gossen.

·        It states that as more you have of something, the less additional satisfaction each additional unit provides.

Law of Demand ·        The Law of Demand states that, there is an inverse relationship between price and quantity demanded.
Law of Equi-Marginal Utility ·        Law of equi-marginal utility suggests that a rational consumer allocates their income among various goods and services in such a way that the marginal utility (satisfaction) per dollar spent is the same for each item.

·        This means consumers strive for equilibrium where they maximize overall satisfaction.

Consumer Surplus ·        Consumer Surplus represents the difference between what consumers are willing to pay for a good or service (their reservation price) and what they actually pay for it.

 

All Copyrights Reserved 2025 Reserved by T4Tutorials