When Total Utility Is Falling

question 328

Multiple Choice

When total utility is falling

• A) marginal utility is at a maximum.
• B) marginal utility is at zero.
• C) marginal utility is negative.
• D) marginal utility has decreased, but is now increasing.

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Definitions:

Compound Interest

Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Present Value

The value today of a sum of money or cash flow expected in the future, adjusted for a particular return rate.

Earnings Rate

The rate of return on investment or the rate at which profits are generated from a business or investment.

Cash Payback Period

The time it takes for an investment to generate enough cash flow to recover its initial cost, used in capital budgeting.