-Adam has 3 apples and 3 oranges. Eve has 2 apples and 2 oranges. The marginal utilities for Adam and Eve are summarized in the above table. Adam asks Eve to exchange one of her apples for an orange.
A) Eve will be willing to make the exchange, because her total satisfaction will remain unchanged.
B) Eve will be willing to make the exchange, because her total satisfaction will increase.
C) Eve will be unwilling to make the exchange, because she loses 5 utils of satisfaction.
D) Eve will be unwilling to make the exchange, because she loses 15 utils of satisfaction.

Question

-Adam has 3 apples and 3 oranges. Eve has 2 apples and 2 oranges. The marginal utilities for Adam and Eve are summarized in the above table. Adam asks Eve to exchange one of her apples for an orange.
A) Eve will be willing to make the exchange, because her total satisfaction will remain unchanged. 
B) Eve will be willing to make the exchange, because her total satisfaction will increase. 
C) Eve will be unwilling to make the exchange, because she loses 5 utils of satisfaction. 
D) Eve will be unwilling to make the exchange, because she loses 15 utils of satisfaction.

Quizplus · Accepted Answer

Eve's total satisfaction increases because by exchanging an apple for an orange, she moves to a combination of goods that provides her with a higher marginal utility for the exchanged goods, thus increasing her overall satisfaction.

-Adam Has 3 Apples and 3 Oranges