Question

Let's say that you choose to buy bread in a grocery store. According to the marginal benefit and marginal cost principle, how many loaves of bread will you purchase if you know the following:
A loaf of bread costs $2.00. Each dollar is worth 100 utils to you (so $2 is worth 200 utils). The first loaf of bread gives you 400 utils of satisfaction. The second loaf of bread gives you 320 utils of satisfaction. The third loaf of bread gives you 280 utils of satisfaction. The fourth loaf of bread gives you 220 utils of satisfaction. The fifth loaf of bread gives you 160 utils of satisfaction. The sixth loaf of bread gives you 30 utils of satisfaction. The seventh loaf of bread gives you no more additional utils.

1. Four loaves.
2. One loaf.
3. Three loaves.
4. Two loaves.
5. Six loaves.
6. Five loaves.
7. Seven loaves.

Answer 1

Six is your answer because if it cost $2.00 and you have 4 it makes sense