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Unformatted text preview: when he could have gone to a buffet and enjoyed all he wanted at a flat price? (This will be easier to answer AFTER class on Tuesday, March 18.) No because fancy restaurants try to create high marginal value by making every bite excellent and not diminishing the marginal value through over-eating. b. Mr. Creosote has to vomit in order to eat more. Do you think that he is optimizing his consumption choices? Hes not optimizing his consumption choices. If he had stopped eating once he got full it would have been optimized but he kept eating making it more painful to continue than enjoyable. c. When should someone stop consuming food? (Hint: what is the equal marginal principle we developed on one of the first few slides in chapter 20?) They would stop consuming food because of the Diminishing Marginal Utility which states that the more of any good or service is consumed, its benefits declines....
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This note was uploaded on 03/26/2008 for the course ECON 002 taught by Professor Mcleod,markpehlivan,ayseozg during the Spring '08 term at Pennsylvania State University, University Park.
- Spring '08