Which of the Following Statements Describes the Principle of Diminishing

question 17

Multiple Choice

Which of the following statements describes the principle of diminishing marginal utility?

• A) Constant additions to monetary amounts result in less and less increased utility.
• B) Trivial or marginal prizes offered in a gamble reduce its monetary value.
• C) Total utility increases proportionally with every additional gamble played.
• D) The value of a gamble diminishes as more and more people become interested in it.

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Definitions:

Dividend Policy

A company's approach to distributing profits back to its shareholders, dictating how much to pay out as dividends and how often.

Alternate Dividend Policy

A strategy used by a company to vary its dividend payments to shareholders based on its earnings or investment opportunities.

Stock Dividend

A dividend payment made in the form of additional shares of the paying company's stock rather than cash.

Common Stock Account

An equity account that represents the ownership interest held by common shareholders in a corporation, including its value and dividends.