After Paying $12 to Enter an All-You-Can-Eat Buffet, You Can

question 36

Multiple Choice

After paying $12 to enter an all-you-can-eat buffet, you can eat as much food as you desire. Which of the following statements is true?

• A) The marginal benefit of your first plate of food is larger than the marginal benefit of your third plate of food.
• B) The marginal cost of a plate of food is sunk.
• C) You should eat as much as possible to maximize your benefit.
• D) It is inefficient to eat at buffet restaurants.

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Definitions:

Ability-to-pay Principle

A tax principle stating that taxes should be levied according to an individual's or entity’s capacity to pay, typically measured by income or wealth.

Constitutional

Relating to the system of beliefs and laws that governs the organization and operation of a state or organization, typically documented in a written constitution.

Public Goods

Public goods are characterized by their non-excludability and non-rivalrous consumption, meaning they can be used by everyone and one person's use does not diminish another's, such as clean air or public parks.

Benefits-received Principle

The concept that individuals or entities should pay taxes in proportion to the benefits they receive from government services.