If Bella eats one piece of pie,she gains a utility of 10.If she continues,a second piece yields a marginal utility of 8,a third will bring marginal utility of 2,and a fourth piece of pie will yield a marginal utility of -2.We can say:
A)Bella's total utility from eating four pieces of pie would be 22.
B)Bella's total utility will decrease if she eats the third piece of pie.
C)Bella's total utility will be maximized if she eats three pieces.
D)Bella's total utility decreases after the first piece of pie.

Question

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, as Bella eats more pieces of pie, the marginal utility will decrease. Therefore, Bella's total utility will be maximized when the marginal utility equals zero. From the given information, we can see that the marginal utility of the third piece of pie is 2, which is the last positive marginal utility. Therefore, Bella's total utility will be maximized if she eats three pieces of pie.

If Bella Eats One Piece of Pie,she Gains a Utility