Figure 14-1. The figure shows a utility function.
-Refer to Figure 14-1. The utility function that is shown exhibits the property of diminishing
A)wealth.
B)utility.
C)marginal wealth.
D)marginal utility.

Question

Figure 14-1. The figure shows a utility function. 
-Refer to Figure 14-1. The utility function that is shown exhibits the property of diminishing
A)wealth. 
B)utility. 
C)marginal wealth. 
D)marginal utility.

Quizplus · Accepted Answer

The utility function shown exhibits diminishing marginal utility, as the slope of the function decreases as consumption (x-axis) increases. This means that each additional unit of consumption provides less additional satisfaction or utility.