Asked by Taylor Lopez on May 08, 2024
Verified
The marginal utility of the first smoothie that Jimmy drinks in the morning is worth $3.00. The marginal utility of the 4th smoothie he drinks is positive while the marginal utility of the 5th smoothie he drinks in the morning is worth $0. This implies that at a price of $0, Jimmy would drink
A) zero smoothies per morning.
B) at most 5 smoothies per morning.
C) more than 5 smoothies per morning, but the actual number is indeterminate from this information.
D) an infinite number of smoothies each morning.
Marginal Utility
The augmented utility or contentment a person obtains by consuming an extra unit of a good or service.
Smoothie
A thick, smooth drink made from blended raw fruit, vegetables, and sometimes dairy products, typically served cold.
Price
The amount of money required to purchase a product or service; determined by factors like demand, supply, and production costs.
- Apprehend the notion of marginal utility and its role in influencing decisions made by consumers.
- Adopt the utility maximization approach to scrutinize consumer decisions concerning diverse products.
Verified Answer
DC
Danielle CartenMay 08, 2024
Final Answer :
B
Explanation :
The marginal utility of the 5th smoothie is $0, indicating that Jimmy would not derive any additional satisfaction from consuming more than 5 smoothies at a price of $0. This means he would drink at most 5 smoothies per morning, as consuming more would not increase his utility.
Learning Objectives
- Apprehend the notion of marginal utility and its role in influencing decisions made by consumers.
- Adopt the utility maximization approach to scrutinize consumer decisions concerning diverse products.