Q.Explain any four exceptions of the law of Diminishing marginal utility.
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Start your 14-day free trial to unlock the full solution →The law of diminishing marginal utility does not apply in cases such as hobbies/rare collections, habits or addictions (e.g. liquor, drugs), a miser's love of money, and the desire for knowledge — in these the marginal utility may stay constant or even rise. Any four exceptions answer the question.
The law states that as a consumer goes on consuming successive units of a commodity, the additional (marginal) utility from each extra unit tends to diminish. However, there are certain apparent exceptions (any four required):
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Hobbies and rare collections: For a collector of rare coins, stamps or paintings, each additional item gives more satisfaction rather than less, so marginal utility seems to increase.
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Habits and addictions: In the case of addictive goods like liquor, tobacco or drugs, the addict may get more utility from successive units, so the law does not operate.
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Miser and money: For a miser, every additional rupee gives greater satisfaction as his hoard grows, so the marginal utility of money appears to rise rather than fall.
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Desire for knowledge (reading): As a student reads more books and gains knowledge, interest and utility often increase, contrary to the law.
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