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Some restaurants offer 'all you can eat'€ meals.

How is this practice related to diminishing marginal utility?

What restrictions must the restaurant impose on the consumer to make a profit?

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Joshua Stredder
Joshua StredderLv10
28 Sep 2019

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Related questions

1. (Law of Diminishing Marginal Utility) Some restaurants offer “all you can eat” meals. How is this practice related to diminishing marginal utility? What restrictions must the restaurant impose on the customer in order to make a profit? (Answers may vary)

2. (Marginal Utility) Is it possible for marginal utility to be negative while total utility is positive? If yes, under what circumstances is it possible?

3. (Role of Time in Demand) In many amusement parks, you pay an admission fee to the park but you do not need to pay for individual rides. How do people choose which rides to go on? (Answers may vary)

4. What is the diamonds-water paradox, and how is it explained? Use the same reasoning to explain why bottled water costs so much more than tap water.

5. Please read Jane Katz’s “The Joy of Consumption: We Are What We Buy,” in the Federal Reserve Bank of Boston’sRegional Review at http://www.bos.frb.org/economic/nerr/rr1997/winter/katz97_1.htm and briefly discuss/summarize the evidence that Katz cites about how the rising value of time has affected consumer spending patterns.

6. Suppose that marginal utility of Good X = 100, the price of X is $10 per unit, and the price of Y is $5. Assuming that the consumer is in equilibrium and is consuming both X and Y, what must the marginal utility of Y be? (Hint: Please apply the formula: MUx/Px = MUy/Py)

7. What is consumer surplus? What happens to consumer surplus as price level falls?

8. Do you think any good which does not exhibit the law of diminishing marginal utility?

What are the major determinants of the elasticity of demand?

Explain the law of diminishing marginal utility, and give an example to illustrate it.

If you were to consume five hamburgers at Wendy's, would you enjoy a consumer surplus? Explain your answer.

How do we measure utility? are interpersonal comparisons valid? Why or why not?

Why would Tommy Watson eventually reach the point of negative marginal utility at an all-you-can-eat restaurant?

Explain the water-diamond paradox.

Why would Tommy Watson eventually reach the point of negative marginal utility at an all-you-can-eat restaurant?

Explain the water-diamond paradox.

If demand is elastic and the price is raised, what happens to total revenue? Can you prove this?

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