Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Diminishing Marginal Utility Definition There is a decline in the marginal utility that a person derives from consuming each additional unit of that product. Diminishing Marginal Utility For example: A family without a car would gain a lot from the use of a first car. However, they would not have as much use for a second car. They might even begin to suffer from the use of a third car. Reminder This is economics class.We can quantify anything. Assume a person puts a value on the consumption of a good. They would generally place less value on the consumption of that same good again. Hot Day Cold Drinks Water You is being sold for CHF 6 a bottle. would buy that first bottle of water. However would you place the same value on a second bottle of water? How about the third? Would you pay CHF 6 for the fourth bottle? Candy Bars Eventually you would begin to feel stomach pain from the consumption of your seventh or tenth candy bar. At this point your gain from consuming the next candy bar is negative. You will actually feel worse if you ate it. However Under certain circumstances an individual can gain from the consumption of an additional good. Example: Theatre tickets – who wants to go alone? Example: Antibiotics- the use of one pill will just make the bacteria stronger. Ten will kill it.