Imagine that it is Thanksgiving Day, and that you just arrived at your family th
ID: 1139849 • Letter: I
Question
Imagine that it is Thanksgiving Day, and that you just arrived at your family thanksgiving dinner. Assume that this is a stereotypical thanksgiving dinner seeing family, telling stories, and of course lots of food. Also assume that there is a near unlimited amount of food (and maybe a relative or two encouraging you too eat and eat and eat) In your initial post, tell us how many plates of food you would normally eat at Thanksgiving dinner, and why not just one more (assume that you don't have to pay for the food or bring anything to attend). Then, tell us how that number might change if you had to start paying $15 for each plate you ate.Explanation / Answer
Answer - Initially when I did not have to pay then I would eat 4 plates. The number of plates would change to 2 if I had to pay $15 for each plate I eat.
Explanation - when I did not have to pay then I would eat till my marginal utility of eating additional plate of food becomes zero. Based on the theory of diminishing marginal utility, my marginal utilities from consuming additional plates are- 30,15,5,0. Hence, I would eat 4 plates.
Now when I had to pay $15 for each plate I eat, then I would eat upto that point where marginal utility becomes equal to the price. Hence, I would eat 2 plates only.