The following statement(s) regarding Utility Functions is/are true: Utility Functions are usually a function of wages. Utility i

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Misha Larkins [42]

2 years ago

9

The following statement(s) regarding Utility Functions is/are true: Utility Functions are usually a function of wages. Utility i

ncreases at a decreasing rate. The Utility Function chosen does not matter. They will all yield the same result.

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1 answer:

jonny [76] · Answer 1 · 2022-11-30T04:29:45+03:00

Answer:

Utility increases at a decreasing rate.

Explanation:

Utility is the total satisfaction derived from consumptjon.

The utility function measures the total satisfaction derived from consumptjon.

Utility increases at a decreasing rate.

This can be illustrated with an example.

Imagine I am coming from a desert with no access to drinking water. I am very thirsty. The satisfaction I would derive from the first cup of water would be the highest. After my first cup, the utility I would derive from other cups would be diminishing.