Figure 27-1.The figure shows a utility function.
-Refer to Figure 27-1.The utility function that is shown exhibits the property of diminishing
A)wealth.
B)utility.
C)marginal wealth.
D)marginal utility.

Question

Figure 27-1.The figure shows a utility function. 
-Refer to Figure 27-1.The utility function that is shown exhibits the property of diminishing
A)wealth. 
B)utility. 
C)marginal wealth. 
D)marginal utility.

Quizplus · Accepted Answer

The utility function shown exhibits the property of diminishing marginal utility, meaning that as the quantity consumed increases, the additional satisfaction from each additional unit decreases. This is indicated by the decreasing slope of the curve. Therefore, D is the best choice.

Figure 27-1.The Figure Shows a Utility Function