Suppose you could quantify the amount of satisfaction you receive from consuming ice cream in money terms.You might say,"I expect to get $3 worth of satisfaction from this ice cream cone." According to traditional economic theory,if the price of this ice cream cone were $3.05,would you buy one?
A) Sure, why not? What's a nickel?
B) Absolutely. It's worth it at that price.
C) No way, because it's not worth it.
D) There is no way to answer this question because you really can't compare the price of something and the amount of satisfaction you expect to receive from it.

Question

Quizplus · Accepted Answer

According to traditional economic theory, consumers weigh the marginal benefit (satisfaction received) against the marginal cost (price) of a good or service. In this case, if the expected satisfaction from an ice cream cone is $3 and the price is $3.05, the marginal cost exceeds the marginal benefit, so the rational decision would be not to buy the ice cream cone. Therefore, the best answer is C, "No way, because it's not worth it."

Suppose You Could Quantify the Amount of Satisfaction You Receive