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Category - Economics

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At an all-you-can-eat buffet, a person devours his first plate of food, enjoys the second and can’t eat the third. How might an economist explain this?
  1. The food’s marginal utility was decreasing.
  2. The supply curve was increasing.
  3. The food’s marginal cost was increasing.
  4. The food’s total utility was decreasing.
Explanation
Answer: A - The food’s marginal utility was decreasing. Marginal utility measures the additional value gained by having more of something. Since the person enjoys each plate less than the one before, the marginal utility decreases.
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