Grace has just eaten a slice of pizza and says it gave her a utility of 8.If she chooses to eat a second slice:
A) she will experience a drop in total utility.
B) she is not acting rationally.
C) she will experience an increase in total utility.
D) None of these is true.

Question

Quizplus · Accepted Answer

Based on the Law of Diminishing Marginal Utility, Grace may experience a decrease in marginal utility from the second slice of pizza, but her total utility will still increase as long as the marginal utility of the second slice is positive. Therefore, it would be rational for her to choose to eat a second slice if her desire for pizza outweighs the potential decrease in marginal utility.

Grace Has Just Eaten a Slice of Pizza and Says