Jacob's estimated utility from pizza is given by 3Z, where Z is the number of pizzas he consumes per month. We can say that:
A)Jacob likes pizza better than steak.
B)Jacob is a vegetarian.
C)Jacob's preferences are transitive.
D)Jacob's marginal utility from pizza is constant.

Question

Quizplus · Accepted Answer

Since Jacob's estimated utility from pizza is given by 3Z, his marginal utility from pizza remains constant. This means that each additional pizza he consumes adds the same amount of utility to his overall satisfaction. Therefore, he can continue to consume pizzas until his total utility maximizes, which may not necessarily mean that he likes pizza better than steak or that he is a vegetarian. We cannot make any assumptions about his preferences from this information. Transitivity of his preferences is also not relevant in this context. The fact that Jacob's estimated utility from pizza is given by 3Z indicates that his marginal utility from pizza is constant. This means that each additional pizza consumed provides the same amount of added utility. None of the other options can be inferred from this information.

Jacob's Estimated Utility from Pizza Is Given by 3Z, Where