The concept of diminishing marginal utility is embedded in the utilitarian rationale for
A)trickle-down effects.
B)enhancing market efficiency.
C)redistributing income.
D)maintaining the status quo income distribution.

Question

Quizplus · Accepted Answer

The concept of diminishing marginal utility suggests that as individuals consume more of a good or service, the additional satisfaction or utility they derive from each additional unit consumed decreases. Utilitarians believe that resources should be allocated in such a way as to maximize overall social welfare, which can be achieved by redistributing income to those who have a lower marginal utility of wealth (i.e. those who derive more satisfaction from an additional dollar of income) than others. Therefore, C is the best choice as it directly relates to the utilitarian rationale for diminishing marginal utility.

The Concept of Diminishing Marginal Utility Is Embedded in the Utilitarian