Jason Is Trying to Decide Whether to Buy a Bagel

question 77

Multiple Choice

Jason is trying to decide whether to buy a bagel or a muffin for breakfast.The bagel costs $.50 and has a marginal utility of 5.The muffin costs $1 and has a marginal utility of 20.Which should he buy,and why?

• A)The muffin,because it has a higher marginal utility
• B)The muffin,because it has a lower marginal utility per dollar
• C)The bagel,because it costs less
• D)The bagel,because it has a higher marginal utility per dollar
• E)The muffin,because it has a higher marginal utility per dollar

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Definitions:

Dictator Game

A behavioral economic experiment where one participant, the "dictator," determines how to split an amount of money between themselves and another participant.

Behavioral Economists

Researchers who study the psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions.

Feelings About Fairness

The emotions and perceptions regarding the fairness or equity of actions, decisions, or distributions among individuals or groups.

Ultimatum Game

A game in experimental economics where one player proposes how to divide a sum of money with another player, who can either accept or reject the proposal.