Marginal Utility Has a Negative Slope

question 41

Multiple Choice

Marginal utility has a negative slope.This is because of the

• A)optimal purchase rule.
• B)law of increasing costs.
• C)law of diminishing marginal utility.
• D)marginal rate of substitution.

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Definitions:

Borrowing

The act of obtaining funds from another party with the promise to repay the principal amount along with interest or other charges.

Actual Inflation Rate

The percentage increase in the general price level of goods and services in an economy over a period of time, as measured by the consumer price index or other methods.

Real Rate

The real rate is the interest rate adjusted for inflation, providing a more accurate measure of the true return on an investment or the true cost of borrowing.

Interest

The cost of borrowing money or the return on investment, typically expressed as a percentage of the principal.