If Dalene's marginal benefit from consuming another cookie is greater than the price of the cookie, then _____.
A)Dalene will not purchase any more cookies as the opportunity cost of purchasing another cookie will be more than its price
B)Dalene will purchase more cookies as her total utility is zero
C)Dalene will purchase more cookies as her marginal utility will decrease with the additional purchase
D)Dalene will purchase more cookies as her marginal utility will increase with the additional purchase
E)Dalene will not purchase any more cookies as a reallocation of her budget will decrease her utility

Question

If Dalene's marginal benefit from consuming another cookie is greater than the price of the cookie, then _____.​
A)Dalene will not purchase any more cookies as the opportunity cost of purchasing another cookie will be more than its price
B)Dalene will purchase more cookies as her total utility is zero
C)Dalene will purchase more cookies as her marginal utility will decrease with the additional purchase
D)Dalene will purchase more cookies as her marginal utility will increase with the additional purchase
E)Dalene will not purchase any more cookies as a reallocation of her budget will decrease her utility

Quizplus · Accepted Answer

If Dalene's marginal benefit is greater than the price of the cookie, this means that she values the additional utility she would get from consuming the cookie more than she values the money she would have to give up to buy it. Therefore, she will continue to purchase more cookies until her marginal benefit equals the price of the cookie, at which point she will have maximized her utility. This is because her marginal utility will increase with the additional purchase until she reaches a point of diminishing marginal utility, at which point her marginal utility will decrease.

If Dalene's Marginal Benefit from Consuming Another Cookie Is Greater