Question

An assumption of the constant marginal utility of money means the importance of money to the consumer is ________. (a) rising (b) falling (c) unchanged (d) none of the above

• A. rising
• B. falling
• C. unchanged
• D. none of the above

Answer 1

The correct option is C

unchanged

An assumption of the constant marginal utility of money means the importance of money to the consumer is ‘unchanged’

Marginal utility of money will remain constant only if the money income of the consumer remains constant. The marginal utility also increases if the money income of the consumer increases.

Hence, the correct option is (c)