When considering diminishing marginal utility, how do the costs compare to the benefits of a fair bet?

Question

Quizplus · Accepted Answer

According to the concept of diminishing marginal utility, the satisfaction or utility derived from each additional unit of a good or service decreases as more is consumed. In the case of a fair bet, although there is a potential for gain, the possibility of loss also exists. As the amount at stake increases, the potential drop in utility due to the loss is likely to exceed the increase in utility due to the gain. Therefore, the costs (in terms of loss of utility) are likely to be greater than the benefits, making choice C the best answer.

When Considering Diminishing Marginal Utility, How Do the Costs Compare