GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In case of utility theory, as income increases, marginal utility of money
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Remains constant
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Increases
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Decreases
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None of these
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Explanation:
Detailed explanation-1: -Answer and Explanation: Marginal utility is the change in amount of satisfaction level with an additional unit of commodity consumed. The marginal utility of money generally increases in starting and then becomes constant after a certain level.
Detailed explanation-2: -Total Utility is maximum only when marginal utility is zero, because at that point any additional unit consumed will lead to a decrease in overall satisfaction.
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