Lisa Beth loves bananas and derives 10 utils of total utility eating the first one. When she consumes a second banana, her total utility increases to 15 utils. Eating the third raises her total utility to 18 utils. Economists reading her likes and dislikes conclude that
A) because the total utility of the first is 10, she is better off consuming that one and no more
B) because the marginal utility of the third banana is 18/3 = 6 utils, she would be better off adding that third to consumption because 6 utils is still better than zero
C) the marginal utility of the second banana is 8 utils, which means she should not eat it
D) the marginal utility of the first banana is zero, even though total utility is 10 utils because at zero bananas, total utility is zero
E) the marginal utility of the third banana is 3 utils, which conforms to the law of diminishing marginal utility
Correct Answer:
Verified
