You go to a buffet. If you maximize utility, the marginal utility of the last bite that you eat will be? ?

Question

a. equal to the price of the buffet

b. as high as possible

c. zero

d. dependent on how much you like the buffet

Answer 1

c. zero

Marginal Utility is the slope of your utility function. It's the extra happiness you get for the extra bit of consumption. Once a rational person stops enjoying something they stop participating.

Another way to think of it is this:

Your total utility is the area under the curve of the marginal utility function. Once the marginal utility function passes through zero, you start adding negative area and detracting from your total enjoyment.

Answer 2

c. zero

To maximize (total) utility - marginal utility should be positive up to zero.

Answer 3

c