You Are Investing $100 Today in a Savings Account at Your

question 67

Multiple Choice

You are investing $100 today in a savings account at your local bank.Which one of the following terms refers to the value of this investment one year from now?

• A)future value
• B)present value
• C)principal amounts
• D)discounted value
• E)invested principal

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Definitions:

Marginal Utility

The increased contentment or advantage obtained by the consumption of an extra unit of a good or service.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers from participating in the market.

Utility

Utility refers to the total satisfaction received from consuming a good or service.

Diminishing Utility

The principle that as consumption of a good or service increases, the marginal utility derived from each additional unit decreases.