If Total Utility Increases at a Decreasing Rate as a Consumer

question 289

Multiple Choice

If total utility increases at a decreasing rate as a consumer consumes more coffee, then marginal utility must

• A) remain constant.
• B) increase also.
• C) decrease.
• D) be negative.

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Definitions:

Excess Reserves

The reserves held by banks that are greater than the minimum amounts required by regulators, which can be lent out or invested.

Checkable Deposits

Bank account balances that can be withdrawn on demand using checks or electronic methods.

Money Supply

Refers to the total amount of money available in an economy at a particular point in time, including cash and deposits.

Fed

The central banking system in the United States, known as the Federal Reserve System, is in charge of managing the country's monetary policy.