After viewing the video clip from Cool Hand Luke, first consider how marginal benefits and marginal...

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Economics

After viewing the video clip from Cool Hand Luke, first considerhow marginal benefits and marginal costs fit in to Lukeâ€™s decision,and how the concept of diminishing marginal utility is at work asLuke eats more and more eggs. What is driving his marginal benefitsto continue to exceed his marginal cost? Consider how Lukeâ€™sdecision would change if he had to actually pay for each egg heeats. How would this affect his choice to continue eating? Considerthe concept of marginal utility per dollar spent (i.e. MU/p) andhow it affects the consumption decisions we make. Have you ever hada time where you actually bought your second choice rather thanyour first choice? That is, can you think of a time where it wasn'tonly about marginal utility for you, but about marginal utility perdollar spent? Explain.

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Initially higher consumption leads to higher utility and the marginal benefit is greater than the marginal cost If he had to pay for each egg he is consuming then he would consume till the dollar worth of additional See Answer

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