What does diminishing marginal utility mean? What will be an ...

[javeds]

What does diminishing marginal utility mean?
 
  What will be an ideal response?

Question 2

A major function of incentive payments, guarantees, and signals is to enable markets to overcome the problem of
 
  A) irrational forecasting.
  B) efficient forecasting.
  C) private information.
  D) public information.

[flexer1n1]

Answer to Question 1

As the consumption of a good or service increases, the marginal utility decreases. For example, the first cup of coffee you drink in the morning will give you great satisfaction. As you keep on drinking more and more cups of coffee, the satisfaction from additional cups will diminish.

Answer to Question 2

C

[javeds]

Thank you

[flexer1n1]

No problemo