Sam, the robot, has a utility meter on his forehead. Sam has just consumed 1 cookie, and the utility meter reads 15 utils. If Sam reacts according to economic theory, Sam's second cookie will increase his utility meter
A) by another 15 utils for a total of 30 utils.
B) by less than 15 utils
C) by more than 15 utils.
D) by zero.

Question

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, as the consumption of a good increases, the additional utility gained from consuming one more unit of the good will eventually start to decrease. Therefore, the second cookie will add less utility than the first cookie, and likely less than 15 utils.

Sam, the Robot, Has a Utility Meter on His Forehead