Diminishing Marginal Utility Means That as More of a Good

question 165

Multiple Choice

Diminishing marginal utility means that as more of a good is consumed

• A) the rate at which total utility increases starts to diminish.
• B) the rate at which total utility increases stays the same.
• C) the rate at which total utility increases starts to increase.
• D) there is no impact on the rate of change of total utility.

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Definitions:

Bargaining

The process of negotiating the terms of a transaction or agreement between parties with differing interests.

Coase Theorem

An economic theory that suggests that if property rights are well-defined and transaction costs are minimal, voluntary negotiations will lead to the efficient resolution of disputes regarding resource allocation.

Cost Of Bargaining

The expenses, in terms of both time and resources, that are involved in reaching an agreement in a bargaining process.

Property Rights

Legal principles that define the ownership and use of resources, including the ability to transfer, exclude, and derive benefits from them.