The Law of Diminishing Marginal Utility Helps to Explain The

question 101

Multiple Choice

The law of diminishing marginal utility helps to explain the:

• A) Upward sloping supply curve.
• B) Equilibrium price.
• C) Downward sloping demand curve.
• D) Equilibrium quantity of a good in the marketplace.

---

Definitions:

Cash Payback Period

The time it takes for an investment to generate an amount of cash flow equal to the initial investment cost.

Annual Net Cash Flows

The amount of cash that a company generates or uses in a given year after all income and expenses are accounted for.

Average Rate of Return

A financial ratio that represents the average net profit or return expected on an investment over its lifetime, expressed as a percentage.

Straight-Line Depreciation

A method of calculating the depreciation of an asset, dividing its cost minus salvage value by its useful life, resulting in equal annual depreciation expenses.