After viewing the video clip from Cool Hand Luke, first considerhow marginal benefits and marginal costs fit in to Luke’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 Luke’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.
