Question

After eating four slices of pizza, you are offered a fifth slice for free. You turn down the fifth slice.
Your refusal indicates that the:

A. Marginal utility for pizza slices is negative
B. total utility was positive for the fourth slice and negative for the fifth slice
C. total utility for pizza slices is negative
D. marginal utility is positive for the 4th slice and negative for the 5th slice

Answer 1

Answer:

The correct answer is letter "D": marginal utility is positive for the 4th slice and negative for the 5th slice.

Explanation:

Marginal Utility refers to the additional benefit or satisfaction gained from consuming one more unit of a good or service. In economics, something has utility if it satisfies any consumer wants or needs whether for usefulness or pleasure. It is a subjective term.

If the marginal utility is positive, consumers would want to acquire more of the good or service but if negative they will stop consuming it. Thus, the marginal utility for the 4th pizza slice is positive but the marginal utility for the 5th slice is negative.