If John's marginal utility derived from the consumption of another candy bar is 1 and the price of the candy bar is $1.50,then
A) this is the last candy bar John will purchase since the marginal utility is less than the price.
B) the opportunity cost of the candy bar is less than $1.50.
C) if John purchases and consumes the candy bar his total satisfaction will go down since the marginal utility is less than the price.
D) there is not enough information to determine if John will or will not purchase the candy bar.

Question

Quizplus · Accepted Answer

The fact that John's marginal utility from another candy bar is 1 and the price is $1.50 only tells us that the marginal benefit of consuming another candy bar is less than the cost of obtaining it. However, we do not know John's total utility, income, or preferences. Therefore, we cannot determine with certainty whether John will or will not purchase the candy bar.

If John's Marginal Utility Derived from the Consumption of Another