If Total Utility Increases as Wealth Increases, the First Derivative

question 2

True/False

If total utility increases as wealth increases, the first derivative of the utility function is negative.

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Definitions:

Income

Money received, especially on a regular basis, for work or through investments, constituting the financial resource available to individuals or entities for expenditure or investment.

Income

Earnings received through work, investments, or government benefits, among other sources.

Permanent Income Hypothesis

A theory suggesting that an individual's consumption at any given time is determined not just by current income but also by their longer-term income expectations.

Consumption

The action of using goods or services for personal use, satisfaction, or to fulfill needs.