A person with a diminishing marginal utility of income:
A) will be risk averse.
B) will be risk neutral.
C) will be risk loving.
D) cannot decide without more information

Question

Quizplus · Accepted Answer

A person with a diminishing marginal utility of income will value each additional dollar less than the previous one. As a result, they will be risk-averse and prefer a certain outcome with a known amount of income instead of taking a gamble with the potential for higher income but also the potential for lower income.

A Person with a Diminishing Marginal Utility of Income