Question

The concept that the next dollar will not give as much happiness as the last dollar...

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

Homework Answers

Answer #1

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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