A friend is telling you that they tend to drink more at parties than they do at home. You ask about why and they tell you that though they enjoy their fifth and sixth drinks the same regardless of where they are, the fact that it is free at the party and they have to pay to replace it at home, you translate that statement into a verification of

Question

Quizplus · Accepted Answer

The statement reflects the notion of diminishing marginal utility because it indicates that the satisfaction (utility) derived from each additional drink does not decrease based on the location (home vs. party), which is a key aspect of diminishing marginal utility. The focus is on how the utility from each additional unit consumed remains the same, rather than on the effects of price changes or wealth on consumption.

A Friend Is Telling You That They Tend to Drink