The Assumption That the Marginal Utility of Wealth Diminishes Implies

question 21

Multiple Choice

The assumption that the marginal utility of wealth diminishes implies that

• A) total utility falls when wealth increases.
• B) the marginal utility of wealth is negative.
• C) total utility increases with wealth and each additional unit of wealth increases total utility by a smaller amount.
• D) total utility increases with wealth and each additional unit of wealth increases total utility by the same amount.

Differentiate between positive and negative externalities.

Recognize the role of government interventions, such as subsidies and taxes, in internalizing externalities.

Understand the Coase theorem and its implications for private solutions to externality problems.

Discuss various policy tools for managing pollution and environmental harm.

---

Definitions:

Intersectionality

A framework for understanding how aspects of a person's social and political identities (gender, race, class, sexuality, ability, etc.) combine to create different modes of discrimination and privilege.

Mary Calkins

An influential American psychologist and philosopher, notable for being the first woman to serve as president of the American Psychological Association.

U.S. Psychology

The study, practice, and application of psychological principles within the context of the United States, influenced by the country's culture, legislation, and historical events.

Conservatism

A political and social philosophy promoting traditional institutions and practices, emphasizing stability and continuity.