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.

Question

Quizplus · Accepted Answer

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.

The Marginal Utility of the First Smoothie That Jimmy Drinks