The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3

-An "all you can eat" restaurant illustrates the economic principle:
A)of consumers' inability to maximize their total utility.
B)that economic theory clearly breaks down under certain circumstances.
C)that marginal utility is always positive.
D)that consumers will stop eating when marginal utility is zero.
E)that consumers will stop eating when total utility is zero.

Question

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3
 
-An "all you can eat" restaurant illustrates the economic principle:
A)of consumers' inability to maximize their total utility. 
B)that economic theory clearly breaks down under certain circumstances. 
C)that marginal utility is always positive. 
D)that consumers will stop eating when marginal utility is zero. 
E)that consumers will stop eating when total utility is zero.

Quizplus · Accepted Answer

The "all you can eat" restaurant illustrates the economic principle that consumers will stop eating when marginal utility is zero. In other words, people will continue consuming food until the point where the additional satisfaction (marginal utility) they receive from consuming one more unit of food is zero. At this point, they will no longer consume more. This principle is consistent with the law of diminishing marginal utility, which states that as a person consumes more of a good, the additional satisfaction they receive from each additional unit will eventually decrease.

The Below Table Shows the Average Utility (In Utils) Obtained