The phrase "the declining marginal utility of money" means that successive additions to one's income produce, on average, less happiness or welfare than did earlier additions.

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The concept of declining marginal utility of money suggests that as an individual’s income increases, each additional unit of income brings less and less additional utility or happiness. This means that the increase in happiness or welfare from each additional dollar earned decreases as income rises. Therefore, the statement "the declining marginal utility of money" means that successive additions to one's income produce, on average, less happiness or welfare than did earlier additions, is true.

The Phrase "The Declining Marginal Utility of Money" Means That