Answer to Question #184824 in Microeconomics for Kwekuaddotey

Question

Using marginal utility theory, how will uncertainty affect people

Answer 1

Uncertainty interrupts our ability to plan for the future. In most cases our brains make decisions for the future based on our past experiences.

People may fail to pay for a good if they project it marginal utility will decline in future.

Marginal utility declines with each additional unit consumption of a good