The marginal benefit to you of drinking one more bottled iced tea is $1.50. The price of a bottle of iced tea is $1.25.
A)If you purchase iced tea you will suffer a net loss of 25 cents per bottle.
B)If you purchase a bottle of iced tea, the net gain to you from doing so is 25 cents.
C)You will not purchase iced tea if you are acting rationally.
D)If you are acting rationally, you will purchase iced tea until the marginal benefit falls to 25 cents.

Question

The marginal benefit to you of drinking one more bottled iced tea is $1.50. The price of a bottle of iced tea is $1.25.
A)​If you purchase iced tea you will suffer a net loss of 25 cents per bottle.
B)​If you purchase a bottle of iced tea, the net gain to you from doing so is 25 cents.
C)​You will not purchase iced tea if you are acting rationally.
D)​If you are acting rationally, you will purchase iced tea until the marginal benefit falls to 25 cents.

Quizplus · Accepted Answer

The net gain from purchasing a bottle of iced tea is calculated by subtracting the cost of the iced tea ($1.25) from the marginal benefit of drinking one more bottle ($1.50), which equals a net gain of 25 cents. This means that the value you place on the iced tea exceeds its cost, making it rational to purchase.

The Marginal Benefit to You of Drinking One More Bottled