Which of the following statements illustrates diminishing marginal utility?
A)An extra dollar of income to a poor person provides that person with more additional utility than does an extra dollar to a rich person.
B)An extra dollar of income to a poor person provides that person with less additional utility than does an extra dollar to a rich person.
C)An extra dollar of income to a poor person provides that person with the same additional utility as does an extra dollar to a rich person.
D)An extra dollar of income to a poor person provides that person with the same total utility as does an extra dollar to a rich person.

Question

Quizplus · Accepted Answer

Diminishing marginal utility suggests that as a person receives more of a good or income, the additional satisfaction from each additional unit decreases. Thus, an extra dollar is more valuable to a poor person than to a rich person.

Which of the Following Statements Illustrates Diminishing Marginal Utility