The Statement "As More of a Good Is Consumed, the Utility

question 186

Multiple Choice

The statement "as more of a good is consumed, the utility a person derives from each additional unit diminishes" is known as the:

• A) water and diamond paradox.
• B) law of diminishing marginal utility.
• C) law of total utility.
• D) marginal-utility-to-price ratio equalization rule.
• E) law of diminishing demand.

---

Definitions:

Samuelson And Solow

Economists Paul Samuelson and Robert Solow, known for their contributions to welfare economics, public finance, and economic growth theories.

Phillips Curve

A curve that shows the short-run trade-off between inflation and unemployment.

Economic Outcomes

The results or consequences of economic activities and decisions on an individual, regional, or global level, including factors like growth, employment, and wealth distribution.

Natural Rate

The concept of a 'natural rate' often applies to unemployment, referring to the level of unemployment consistent with a stable rate of inflation, not precipitated by short-term economic fluctuations.