Question

diminishing marginal utility means that ______.
○ the price of a product decreases with the volume purchased
○ the value of a product decreases with each unit purchased
○ the demand for a product decrease with each unit purchased
○ none of the above
question 23 (0.5 points)
the likelihood that an insurance policy will cause higher consumption.
○ moral hazard
○ higher prices
○ lower prices
○ selective enrollment

Explanation:

First Question (Diminishing Marginal Utility)

Diminishing marginal utility is an economic concept (subfield of Business - Economics) stating that as a consumer consumes more units of a good, the additional utility (satisfaction/value) from each additional unit decreases.

• The first option is about price - quantity relationship (like economies of scale or price - demand, not marginal utility).
• The second option says the value (utility) of a product decreases with each unit purchased, which matches the definition.
• The third option confuses demand (quantity demanded at different prices) with marginal utility.

• Moral hazard in economics (subfield of Business - Economics) occurs when an entity (like an insured person) takes more risks or increases consumption of a service (e.g., medical care) because they are insured and do not bear the full cost.
• Higher prices would generally decrease consumption, not increase.
• Lower prices could increase consumption but is not related to insurance - induced consumption.
• Selective enrollment is about who enrolls in insurance (adverse selection - related), not about consumption after enrollment.

Answer:

the value of a product decreases with each unit purchased

Second Question (Insurance Policy and Consumption)