Recently, Mina's wealth increased by $525. If her wealth were to increase by another $525 in the near future, then her utility would increase, but not by as much as it increased with the recent increase to her wealth. Based on this information, and graphing wealth on each horizontal axis, Mina's utility function
A)and marginal utility function are both upward sloping.
B)and marginal utility function are both downward sloping.
C)is upward sloping and her marginal utility function is downward sloping.
D)is downward sloping and her marginal utility function is upward sloping.

Question

Quizplus · Accepted Answer

Mina's utility increases with her wealth, indicating her utility function is upward sloping. However, the diminishing increase in utility with additional wealth suggests her marginal utility decreases as wealth increases, making the marginal utility function downward sloping.

Recently, Mina's Wealth Increased by $525