If Al is risk averse, as his wealth increases, his total utility of wealth ________ and his marginal utility of wealth ________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases

Question

Quizplus · Accepted Answer

For a risk-averse individual, total utility increases with wealth, but the marginal utility of wealth decreases as wealth increases due to diminishing marginal utility.

If Al Is Risk Averse, as His Wealth Increases, His