If we allow interpersonal comparisons of utility, and the law of diminishing marginal utility holds, then what can we reasonably suppose about the marginal utility of Bill Gates' millionth dollar?
A) It is less than the marginal utility of your hundredth dollar.
B) It is more than the marginal utility of your hundredth dollar.
C) It is equal to the marginal utility of your hundredth dollar.
D) It is equal to zero.
E) It yields higher satisfaction than your hundredth dollar.

Question

Quizplus · Accepted Answer

Given the law of diminishing marginal utility, as one's wealth increases, the additional satisfaction gained from an extra unit of wealth decreases. Therefore, the marginal utility of Bill Gates' millionth dollar would be less than that of a significantly less wealthy individual's hundredth dollar, due to the vast difference in their respective wealth levels.

If We Allow Interpersonal Comparisons of Utility, and the Law