Question

After eating four slices of pizza, you are offered a fifth slice for free. You turn down the fifth slice. Your refusal indicates that the:

-Marginal utility for the fourth slice is the largest among all slices
-Total utility for five pizza slices is negative
-Marginal utility for four pizza slices is negative
-Average utility is positive for the fourth slice and constant for the fifth slice
-Marginal utility is positive for the fourth slice and negative for the fifth slice

Answer 1

The refusal of the fifth slice indicates the marginal utility is positive for the fourth slice but negative for the fifth, in accordance with the law of diminishing marginal utility.

Step-by-step explanation:

The refusal of the fifth slice of pizza indicates that the marginal utility is positive for the fourth slice and negative for the fifth slice. This concept is explained by the law of diminishing marginal utility, which holds that as more of a good is consumed, the additional satisfaction from each new unit is less than the satisfaction gained from the previous unit. Hence, after consuming four slices, the fifth slice would contribute no additional utility or might even have a negative effect, pointing to an already satisfied or over-sated appetite.