The law of diminishing marginal utility
A)allows us to make interpersonal utility comparisons.
B)tells us that an additional dollar is worth less to a millionaire than to a poor person.
C)tells us the worth of an additional dollar of income.
D)tells us that an additional dollar of income is worth less than the preceding dollar of income.
E)a, b, and d

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as a person consumes more of a good, the additional satisfaction (utility) gained from consuming an additional unit of that good decreases. This principle can be applied to income, where each additional dollar earned provides less utility than the one before, hence option D is correct. Options A, B, and C are not directly related to the law of diminishing marginal utility.

The Law of Diminishing Marginal Utility