If a good is offered to a rational individual for free, she will
A)accept unlimited quantities of the good each time period
B)stop consuming it when its marginal utility begins to increase
C)stop consuming it when its marginal utility begins to diminish
D)stop consuming it when its marginal utility equals zero
E)stop consuming it when its total utility equals zero

Question

Quizplus · Accepted Answer

A rational individual will continue to consume a good until the marginal utility (additional satisfaction from consuming one more unit) equals zero, as consuming beyond this point would not provide any additional benefit.

If a Good Is Offered to a Rational Individual for Free