Marie is buying bananas. She decides that she would like to purchase three bananas at the price of $0.25 per banana, but not a fourth banana. Which of the five foundations of economics, illustrated above, best describes Marie's thinking? Choose one: A. opportunity cost B. trade-offs C. marginal thinking D. trade creates value E. incentives

Question

Kaylin

Business

27 May, 12:17

Marie is buying bananas. She decides that she would like to purchase three bananas at the price of $0.25 per banana, but not a fourth banana. Which of the five foundations of economics, illustrated above, best describes Marie's thinking? Choose one: A. opportunity cost B. trade-offs C. marginal thinking D. trade creates value E. incentives

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Answers (1)

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Broderick Garrison · Answer 1

Answer: Option (C) is correct.

Explanation:

Marie's thinking in this question is marginal.

According to the law of diminishing marginal utility, as the consumer consumes more and more units of a commodity the utility derive from the consumption of that goes on diminishing. Therefore, Marie must be thinking about the marginal utility that she gets from the fourth unit of banana.