The host at a party offers Justin a sixth beer.Justin says, "No thanks, man.The marginal utility of that fifth beer was, like, 20 cents, but the marginal utility of the sixth would be minus 10 cents." From his comments, we deduce that Justin
A)is an alcoholic.
B)may think that a sixth beer would make him sick.
C)is irrational.
D)wrongly estimates the marginal utility of the fifth beer.

Question

Quizplus · Accepted Answer

Justin's statement implies that he believes that the additional benefit he would receive from drinking a sixth beer is less than the cost or negative effect it would have on him, indicating that he may believe it would make him sick or impair him in some way. This is a rational decision based on his estimate of marginal utility, and does not necessarily imply that he is an alcoholic or irrational.

The Host at a Party Offers Justin a Sixth Beer