Answered step by step
Verified Expert Solution
Question
1 Approved Answer
reply to This Cool Hand Luke movie clip does a great job of illustrating diminishing marginal usefulness. At first, Luke was benefiting by eating more
reply to This Cool Hand Luke movie clip does a great job of illustrating diminishing marginal usefulness. At first, Luke was benefiting by eating more eggs than he was hurting, but eventually, that stopped being the case. He would then have zero utils at that point. After then, it would start to decrease, indicating a declining marginal utility. He would keep getting ill and sicker from it. Luke has a huge marginal gain since the more he consumes, the closer he is to receiving payment for completing the 50 eggs. Luke would probably have had a different reaction if he had to pay for the eggs. There would then be a much higher Marginal utility per dollar spent. Sense he was not paying for the eggs in the video he was simply looking at his marginal utility, but not cost. With cost I doubt he would have been able to finish them because at some point the cost would outweigh the potential gain of money earned if he does finish them. If Luke were required to pay for the eggs, I think his choice would be different. At that point, he would only eat for as long as the bet's
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started