Assume that Jackie concludes that he should eat less and play racquetball more. In this situation, it must be true that the marginal utility of the last dollar spent on food is
A) more than the marginal utility of the last dollar spent on racquetball.
B) less than the marginal utility of the last dollar spent on racquetball.
C) equal to the marginal utility of the last dollar spent on racquetball.
D) negative and less than the marginal utility of the last dollar spent on racquetball.

Question

Quizplus · Accepted Answer

If Jackie concludes that he should eat less and play racquetball more, it means that at the current level of consumption, the marginal utility of the last dollar spent on food is less than the marginal utility of the last dollar spent on racquetball. Otherwise, he would not have decided to reduce his consumption of food and increase his consumption of racquetball. Therefore, the correct answer is B.

Assume That Jackie Concludes That He Should Eat Less and Play