Regretting the last unit of consumption of beer implies that
A) the total utility from drinking beer is negative.
B) beer is an inferior good.
C) the marginal utility of the last unit of beer consumed is negative.
D) the demand curve for beer is horizontal.

Question

Quizplus · Accepted Answer

Regretting the last unit of consumption of beer implies a decrease in satisfaction, which means the marginal utility of that last unit is negative. Therefore, the correct option is C. Option A is not possible because if the total utility from drinking beer was negative, the consumer would not consume it. Option B is not correct because regretting the last unit of consumption does not provide information about the income level of the consumer. Option D is not relevant to the situation.

Regretting the Last Unit of Consumption of Beer Implies That