Diminishing marginal utility of wealth implies that the utility function is
A)upward-sloping and has decreasing slope.
B)upward-sloping and has increasing slope.
C)downward-sloping and has decreasing slope.
D)downward-sloping and has increasing slope.

Question

Quizplus · Accepted Answer

Diminishing marginal utility of wealth means that as wealth increases, the additional satisfaction (utility) gained from an additional unit of wealth decreases. This implies an upward-sloping utility function with a decreasing slope, as each additional unit of wealth adds less to utility than the previous one.

Diminishing Marginal Utility of Wealth Implies That the Utility Function