Economics Marginal Utility Questions
The marginal utility of wealth influences the decision to save or spend by considering the additional satisfaction or benefit derived from each additional unit of wealth. When the marginal utility of wealth is high, individuals are more likely to save as they perceive a greater value in accumulating additional wealth. On the other hand, when the marginal utility of wealth is low, individuals are more inclined to spend as they believe the satisfaction gained from consuming goods and services outweighs the benefits of saving. Therefore, the decision to save or spend is influenced by the marginal utility of wealth, with higher marginal utility leading to increased saving and lower marginal utility leading to increased spending.