An individual finds that,as their income increases,their total utility also increases,but at a decreasing rate.This occurrence can be attributed to:
A)diminishing marginal utility.
B)being risk-neutral.
C)expected values.
D)efficient allocation of risk.

Question

Quizplus · Accepted Answer

This phenomenon is known as diminishing marginal utility, which means that as an individual consumes more of a good or service, the additional utility gained from each additional unit consumed decreases. This explains why the individual's total utility is still increasing but at a decreasing rate as their income increases.

An Individual Finds That,as Their Income Increases,their Total Utility Also