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:

Accounting Profit

The difference between the total revenue received from sales and the total explicit costs of a business.

Explicit Costs

Direct payments made to others in the course of running a business, such as wages, rent, and materials.

Implicit Costs

The opportunity costs of using resources that a business already owns, representing the potential income lost in employing them in a specific task.

Forgone Income

Income not earned due to choosing an alternative action, such as studying full-time instead of working.