If Total Utility Declines as an Additional Unit of a Commodity

question 73

Multiple Choice

If total utility declines as an additional unit of a commodity is purchased,

• A)marginal utility must be rising.
• B)marginal utility is negative.
• C)marginal utility is positive but falling.
• D)its price must have risen.
• E)marginal utility is zero.

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Definitions:

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, taking into account its current market price, face value, interest rate, and time to maturity.

Par Value

Is the face value of a bond or stock, representing the amount that will be returned to the investor at maturity or the value at which the stock is noted on the balance sheet.

Default Risk Premiums

The additional yield that investors demand for holding a bond that has a risk of default over a risk-free security.