Question

Marginal utility of money can NOT be

1. Positive

2. Negative

3. Zero

Which of above is/are correct?

A Only 1 Correct Answer Incorrect Answer
B Only 2 Correct Answer Incorrect Answer
C Only 2 and 3 Correct Answer Incorrect Answer
D Only 1 and 2 Correct Answer Incorrect Answer

Solution

Marginal utility of money can be positive or zero, reflecting the value derived from the last unit of money spent. It typically does not become negative as spending money always leads to some level of utility.

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