Which of the Following Examples Best Describes the Concept of Diminishing

question 26

Multiple Choice

Which of the following examples best describes the concept of diminishing marginal benefit?

• A) If the weather gets cold, the demand for ice cream will fall.
• B) With each additional pen Jill buys, her willingness to pay for another pen decreases.
• C) Each additional unit of ice cream that John consumes gives him more and more satisfaction.
• D) If a seller of notebooks in a perfectly competitive market charges above the market price, his profit decreases.

---

Definitions:

Real Assets

Physical or tangible assets such as gold, real estate, and commodities, which have intrinsic value due to their substance and physical properties.

Asset Allocation

The allocation of investment portfolio across various asset classes, such as stocks, bonds, and cash, to achieve a specific investment goal.

Broad Asset Classes

Categories of assets, such as stocks, bonds, real estate, and commodities, that behave similarly in the marketplace and are subject to the same laws and regulations.

Safe Securities

Investment instruments deemed to have a lower risk of loss, often with lower potential returns as compared to riskier investments.