When you chose to buy the second cup of coffee instead of the third bagel, which of the following is necessarily CORRECT?
A) The second coffee will give you higher marginal utility.
B) The second coffee is cheaper than the third bagel.
C) The marginal utility per dollar from the third bagel is less than the marginal utility per dollar from the second coffee.
D) Both answers A and C are correct.

Question

Quizplus · Accepted Answer

The decision to buy the second coffee instead of the third bagel suggests that the marginal utility per dollar from the second coffee is higher than that from the third bagel, as consumers aim to maximize utility per dollar spent.

When You Chose to Buy the Second Cup of Coffee