The Principle of Diminishing Marginal Utility Says That

question 172

Multiple Choice

The principle of diminishing marginal utility says that:

• A) as more of a good or service is consumed, demand decreases.
• B) as more of a good or service is consumed, the price will rise.
• C) the marginal utility of additional units consumed increases.
• D) an increase in income causes demand to increase.
• E) the marginal utility of additional units consumed decreases.

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Definitions:

Borrow

To receive something, especially money, from a person or financial institution with the agreement to return it, typically with interest, at a future date.

Gross Domestic Product (GDP)

The nation’s expenditure on all the goods and services produced in the country during the year at market prices; represented by GDP.

Economics

The social science that studies the production, distribution, and consumption of goods and services, and how individuals, businesses, and governments make choices about allocating resources.

Investment

The act of allocating resources, usually money, into assets with the expectation of generating income or profit.