The concept that the next dollar will not give as much happiness as the last dollar is known as
a. declining marginal utility for money
b. inflation
c. loss of purchasing power
d. risk
Answer:a.Declining marginal utility of money
The concept that the next dollar will not give as much happiness as the last dollar is known as declining marginal utility for money.According to the law of diminishing marginal utility ,the marginal utility derived from additional units decreases with increase in consumption provided everything else remains the same.
Other options explained
Inflation
False.Since inflation refers to the increase in price of goods and services over a period of time
Loss of purchasing power
False .Consumers will experience a loss of purchasing power as prices increase.
Risk
False.From a finance perspective risk refers to the possibility that the actual outcome from an investment will differ from expected outcome.
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