Question

what is diminishing marginal utility?
the effect of substituting goods due to price changes.
each additional unit of a good provides less satisfaction than the previous.
the measure of utility across goods with fixed prices.
the satisfaction gained from purchasing any good.
the total utility derived from all consumer choices.
question 5
what does fungible mean?
the additional satisfaction gained from consuming units.
units of a good are mutually substitutable and carry equal value.
the constraint of purchasing goods with limited income.
the relationship between income and utility maximization.
a branch of economics studying consumer choices.
question 6
what is the income effect?
a higher price reduces buying power, even if income remains the same.
the satisfaction provided by consuming additional units.
the relationship between prices and substitution effects.
the utility gained from price ratios across goods.

Explanation:

• Diminishing marginal utility is a key concept in economics where each additional unit of a good provides less satisfaction than the previous one. For example, the first slice of pizza may be very satisfying, but the second less so, and the third even less.
• Fungible goods are those where units are mutually - substitutable and carry equal value. For instance, one dollar bill is fungible with another dollar bill.
• The income effect occurs when a higher price reduces buying power, even if income remains the same. If the price of a good goes up, consumers can afford fewer goods with their fixed income.

Answer:

• Question 4: Each additional unit of a good provides less satisfaction than the previous.
• Question 5: Units of a good are mutually substitutable and carry equal value.
• Question 6: A higher price reduces buying power, even if income remains the same.