When Someone Is Served Pizza and Soda for Dinner,it Is

question 32

Multiple Choice

When someone is served pizza and soda for dinner,it is typical behavior to eat some pizza,then drink some soda,then eat more pizza,and so on,until the person stops consuming both.How can this behavior be explained using economic concepts?

• A) The individual is revealing that he can't decide whether he gains more utility from pizza or from soda.
• B) People tend to act irrationally around food, and the concept of utility maximization cannot be applied.
• C) The person eats pizza until his marginal utility for pizza is lower than it is for soda, then he switches to soda.
• D) The concept of unlimited wants says he will never tire of eating pizza and soda.

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Definitions:

Marginal Costs

The augmentation in total expenditures resulting from the production of an additional unit of a product or service.

Law of Diminishing

Refers to the Law of Diminishing Returns, which states that continuing to increase one input, while holding others constant, will eventually result in smaller and smaller additions to output.

Stolen Goods

Items that have been illegally taken from their rightful owner, typically sold in underground markets.

All-You-Can-Eat Buffet

A type of meal serving format where diners pay a fixed price to consume as much food as they desire from a variety of dishes.