Figure 14-1. The figure shows a utility function.
-Refer to Figure 14-1. For the person to whom this utility function applies,
A)the more wealth she has, the less utility she gets from an additional dollar of wealth.
B)the more wealth she has, the more utility she gets from an additional dollar of wealth.
C)her level of satisfaction will be enhanced more by an increase in wealth from $600 to $800 than it would be by an increase in wealth from $400 to $600.
D)her level of satisfaction will be enhanced equally by an increase in wealth from $600 to $800 or by an increase in wealth from $400 to $600.

Question

Figure 14-1. The figure shows a utility function. 
-Refer to Figure 14-1. For the person to whom this utility function applies,
A)the more wealth she has, the less utility she gets from an additional dollar of wealth. 
B)the more wealth she has, the more utility she gets from an additional dollar of wealth. 
C)her level of satisfaction will be enhanced more by an increase in wealth from $600 to $800 than it would be by an increase in wealth from $400 to $600. 
D)her level of satisfaction will be enhanced equally by an increase in wealth from $600 to $800 or by an increase in wealth from $400 to $600.

Quizplus · Accepted Answer

The figure shows that the slope of the utility function is decreasing, meaning that the person gets less utility from an additional dollar of wealth as their wealth increases. Therefore, choice A is the correct answer. Choices B, C, and D are incorrect.