Asked by Kelly Walter on May 08, 2024
Verified
Use diminishing marginal utility to explain why millionaires often do not have many homes, even if they can afford it.
Marginal Utility
refers to the additional satisfaction or utility gained from consuming one more unit of a good or service.
Millionaires
Millionaires are individuals whose net worth or wealth is equal to or exceeds one million units of currency.
- Explain the principle of diminishing marginal utility and its implications on consumer choices.
Verified Answer
JH
Juliano HeqimajMay 14, 2024
Final Answer :
Millionaires often do not have many homes due to diminishing marginal utility. Each additional house they obtain brings them less and less added satisfaction. The more houses they obtain, the less they want more of them even though they can afford them.
Learning Objectives
- Explain the principle of diminishing marginal utility and its implications on consumer choices.