What Is Marginal Utility?

The principle of diminishing marginal utility means that when consumers consume goods, the utility of each unit of goods to consumers is different, and they have a diminishing relationship.

Marginal Utility Principle

discuss
The principle of diminishing marginal utility means that when consumers consume goods, the utility of each unit of goods to consumers is different, and they have a diminishing relationship.
To give a simple example: For a hungry person, the first bowl of rice is the most effective for him, and the second bowl of rice is not so big. After eating to a certain extent, if you eat it again, the rice will The utility is negative, that is, not only can't give him benefits, but burden. The same is true for the person who bought the car. When he bought the first car, he felt much more convenient and had a great psychological satisfaction. When he bought a second car, because he couldn't use two cars at the same time, the second car was not as effective as the first car. Of course, the second car can also serve as a backup, and it will increase his display capital. At this time, the total utility is increased, but the increase is not as large as when he bought the first car.
Chinese name
Marginal Utility Principle
Foreign name
Marginal utility theory
Attributes
principle
Time
Consumer goods
concept
If he continues to buy a car, after buying a car, he will not only hire a driver, but also prepare a parking garage, and at the same time guard against thieves. These costs may be higher than the utility of the third car.
Think about it. People with a monthly income of 1,000 yuan gamble until one loses. One person becomes poor, and the other person doubles his income. What this brings to society is what the prospects of the latter's increase in income will only make him more comfortable, but the former has fallen into a predicament of being unable to live. This result is not conducive to social justice or social stability.
Significance: Samuelson once said: "The effect of increasing the income of 100 yuan is less than the effect of losing 100 yuan." This is the performance of diminishing marginal utility.

IN OTHER LANGUAGES

Was this article helpful? Thanks for the feedback Thanks for the feedback

How can we help? How can we help?