Diminishing Marginal Utility Means That as More of a Good

question 52

Multiple Choice

Diminishing marginal utility means that as more of a good is consumed,

• A) the consumption of some other good must diminish.
• B) the price of the good rises.
• C) the utility of an additional unit decreases.
• D) more income is spent.
• E) the price of the good falls.

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Definitions:

Money Demand Curve

A graphical representation showing the relationship between the interest rate and the total quantity of money that people hold at various levels of interest.

Nominal GDP

The market value of all final goods and services produced within a country in a specific period, measured in current prices.

Price Level

An index that measures the average of current prices of goods and services in comparison with the prices in a base year.

Money Demand Curve

A graphical representation that shows the relationship between the quantity of money people want to hold and the interest rate.