The fact that an ounce of gold is priced higher than an ounce of chocolate suggests that
A)the marginal utility of the last unit of gold consumed or purchased is greater than the marginal utility of the last unit of chocolate consumed.
B)the total utility of gold purchased is greater than the total utility of chocolate consumed.
C)gold is a normal good, while chocolate is an inferior good.
D)there are many substitutes for chocolate but few for gold.

Question

Quizplus · Accepted Answer

The price of a good is often related to its marginal utility rather than its total utility. Gold's higher price suggests its marginal utility is greater than that of chocolate, meaning the satisfaction gained from the last unit consumed or purchased is higher for gold than for chocolate. This does not necessarily relate to total utility, the classification of goods as normal or inferior, or the availability of substitutes.

The Fact That an Ounce of Gold Is Priced Higher