Suppose that Jacob is going to a buffet restaurant that allows him to eat as many chicken wings as he wants at a fixed price. How would you predict the number of chicken wings that Jacob will eat using utility theory?
What will be an ideal response?
Utility theory predicts that Jacob will try to maximize his utility from his chicken wing consumption at the restaurant. This means that he will continue to eat one more chicken wing until his marginal utility becomes zero and so his total utility from the chicken wings is maximized.
You might also like to view...
Which of these is NOT one of the issues that makes it difficult for the Fed to choose the right course of action at the right time?
A. The Fed's incomplete and imperfect control of the money supply B. The quality of the data the Fed uses C. The time that it takes for the Fed to decide on a course of action D. The time it takes for Fed action to have an impact
The income earned by the people who sell the services of the factor of production ________ is called ________
A) capital; rent B) entrepreneurship; wages C) land; profit D) entrepreneurship; profit