A restaurant offers an "all you can eat" lunch buffet for $12. Jim has eaten three servings and is trying to decide whether or not to go back for a fourth. The economic way of thinking suggests that Jim should go back for the fourth serving if and only if

Question

Quizplus · Accepted Answer

The economic way of thinking suggests that Jim should only go back for a fourth serving if the marginal benefit of the additional serving is greater than zero. This means that Jim should only continue consuming food up to the point where the additional satisfaction he gets from each additional serving is greater than the cost of that serving (which is essentially zero in this case since it's an all-you-can-eat buffet). Going back for the fourth serving would be irrational if the marginal benefit is zero or negative, as he would be consuming food that is not providing him with any additional satisfaction. Therefore, option A is the best choice.

A Restaurant Offers an "All You Can Eat" Lunch Buffet