The last $200 of Mary's wealth adds more to her utility than another $200 would.Based on this information,Mary's utility function
A)and marginal utility function are both upward sloping.
B)and marginal utility function are both downward sloping.
C)is upward sloping and her marginal utility function is downward sloping.
D)is downward sloping and her marginal utility function is upward sloping.

Question

Quizplus · Accepted Answer

If the last $200 adds more to Mary's utility than another $200, then her marginal utility must be decreasing. If her marginal utility is decreasing, then her utility function must also be upward sloping, but at a decreasing rate, since marginal utility is the derivative of the utility function. Therefore, the correct answer is C.

The Last $200 of Mary's Wealth Adds More to Her