Utility Maximization Nate is currently spending his entire budget on two goods: food and entertainment. He was willing to pay $2 for the last unit of food he purchased and $2,000 for the last unit of entertainment he purchased. Which of the following is the best explanation of why he is willing to pay so much more for entertainment? Choose 1 answer: Nate is irrational and doesn't understand that food is a necessity and entertainment is not. Nate's total utility from entertainment is higher than his total utility from food Nate's total utility from food is higher than his total utility from entertainment. Nate's marginal utility from food is higher than his marginal utility of entertainment

Utility Maximization Nate is currently spending his entire budget on two goods: food and entertainment. He was willing to pay $2 for the last unit of food he purchased and $2,000 for the last unit of entertainment he purchased. Which of the following is the best explanation of why he is willing to pay so much more for entertainment? Choose 1 answer: Nate is irrational and doesn't understand that food is a necessity and entertainment is not. Nate's total utility from entertainment is higher than his total utility from food Nate's total utility from food is higher than his total utility from entertainment. Nate's marginal utility from food is higher than his marginal utility of entertainment

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Utility Maximization
Nate is currently spending his entire budget on two goods: food and entertainment. He was willing to pay $2 for
the last unit of food he purchased and $2,000 for the last unit of entertainment he purchased.
Which of the following is the best explanation of why he is willing to pay so much more for entertainment?
Choose 1 answer:
Nate is irrational and doesn't understand that food is a necessity and entertainment is not.
Nate's total utility from entertainment is higher than his total utility from food
Nate's total utility from food is higher than his total utility from entertainment.
Nate's marginal utility from food is higher than his marginal utility of entertainment

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