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If You Talk to People Who Are Addicted to Alcohol

Question 38

Multiple Choice

If you talk to people who are addicted to alcohol, they will tell you that the more they consume, the more they long for and value the next drink. If you think about their sorry predicament in terms of utility analysis, you can conclude about their consumption of alcohol that


A) utility theory does not apply to alcohol
B) total utility keeps decreasing as more is consumed
C) marginal utility keeps increasing as more is consumed
D) the law of diminishing marginal utility is present here
E) total and marginal utility keep increasing as more is consumed, but total utility is
Always greater than marginal utility

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