Assume that Juan concludes that he should eat less and play video games more. In this situation, it must be TRUE that the marginal utility of the last dollar spent on food is
A) more than the marginal utility of the last dollar spent on video games.
B) less than the marginal utility of the last dollar spent on video games.
C) equal to the marginal utility of the last dollar spent on video games.
D) negative and less than the marginal utility of the last dollar spent on video games.

Question

Quizplus · Accepted Answer

If Juan decides to eat less and play more video games, it means that the marginal utility of the last dollar spent on food is less than the marginal utility of the last dollar spent on video games. This is because he is willing to cut back on the former in order to increase his consumption of the latter, indicating that he values video games more highly than food at the margin.

Assume That Juan Concludes That He Should Eat Less and Play