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:

A. Marginal utility for four slices of pizza is negative
B. Total utility for five slices is negative
C. Marginal utility is positive for the fourth slice and negative for the fifth
D. Marginal utility for the fourth slice is the largest amongst all the slices

Answer 1

Refusing the fifth slice of pizza indicates that the marginal utility is positive for the fourth slice and negative for the fifth.

Step-by-step explanation:

The refusal to accept the fifth slice of pizza indicates that the marginal utility is positive for the fourth slice and negative for the fifth. According to the law of diminishing marginal utility, the satisfaction or utility obtained from each additional unit of a good tends to decline. In this case, the first four slices of pizza provided increasing satisfaction, but the fifth slice would bring less satisfaction than the previous slices.