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  • ICAR and TNAU E-Course Summarized

    Summarized Notes
  • Which is the second rule of H. H. Gossen?

    Question: Which is the second rule of H. H. Gossen?

    Options:

    Law of Diminishing Marginal Utility
    Law of Equi Marginal Utility
    Consumer surplus
    Law of variable Proportions

    Gossen's First Law is the "law" of diminishing marginal utility: that marginal utilities are diminishing across the ranges relevant to decision-making.
    Gossen's Second Law, which presumes that utility is at least weakly quantified, is that in equilibrium an agent will allocate expenditures so that the ratio of marginal utility to price (marginal cost of acquisition) is equal across all goods and services.                                                           
    Gossen's Third Law is that scarcity is a precondition for economic value.
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