Use Figure 15.1 to answer the following questions.
-In the utility functions in Figure 15.1,curve b exhibits:
A)diminishing marginal utility.
B)economies of scale.
C)risk seeking.
D)satiation.
E)unrealistic behavior.

Question

Use Figure 15.1 to answer the following questions. 
-In the utility functions in Figure 15.1,curve b exhibits:
A)diminishing marginal utility. 
B)economies of scale. 
C)risk seeking. 
D)satiation. 
E)unrealistic behavior.

Quizplus · Accepted Answer

Curve b exhibits diminishing marginal utility because as consumption increases, the additional satisfaction gained from each additional unit consumed decreases.