David and Chinhui both get 200 utils from four lunches at a local restaurant per month. What is true based on this information?
A) David and Chinhui have the same amount of happiness
B) David would be happier if he does something else that gives him 201 utils (assuming the price of the substitute item is the same or less).
C) The fourth lunch gives both David and Chinhui the same amount of additional utils.
D) Neither David nor Chinhui has the problem of diminishing marginal utility.

Question

Quizplus · Accepted Answer

B is correct because if David can get 201 utils from an alternative activity or item, assuming the cost is the same or less, he would indeed be happier according to the principle of utility maximization. This is because individuals aim to achieve the highest utility (satisfaction or happiness) with their resources.

David and Chinhui Both Get 200 Utils from Four Lunches