The rule of diminishing marginal utility basically states that the more and more an individual uses a service or consumes a good, they will gain less and less utility per unit. Simply put, the more you do something, the less satisfaction you will receive for continuing to do that thing. For a majority of kids (and even adults), a love for candy or chocolate is something we can all relate to. Halloween gives us an excuse to run around from house to house collecting as much sugar as we can humanly handle. Then, over the next week, or month, or year, we continue to stuff our faces with these delicious treats.
Yet, at what point do we give up trying to finish all of our candy and throw it all away? At what point do we have to put down that Snickers bar because our teeth are falling out or our heads hurt from the extreme sugar rush? This is where diminishing marginal utility comes into play. Using this idea, we are able to decide how much satisfaction we will gain from eating one piece of candy. Let's assume for this example, we are able to get 10 utils from a single piece of candy. Then, we go to eat another piece of candy, but this time we only receive 8 utils. The pattern continues, and we receive fewer utils until eventually, we gain absolutely nothing from eating candy (except cavities!). When we reach that point of a marginal utility of 0, we are saying that while eating the next piece of candy will not mentally hurt us in any way, we are not gaining anything from it as well. Thus, we are at a neutral point in our candy eating endeavor.
The trouble occurs when we decide to eat that piece of candy worth 0 utils. Now, our next piece of candy is worth -2 utils, which means we will actually lose satisfaction if we decide to eat this candy. In summary, you should listen to the rule of diminishing marginal utility and stop eating candy when your marginal utils reach 0.
I really enjoyed this post because I can relate to it personally. As I eat more and more of the left over candy from Halloween this year, I notice my marginal utility dropping. After continuously eating the same candy, I notice myself no longer enjoying it as much, to the point I do not want it at all. This is the same as the example you used in your blog. As the utils I receive from the candy I eat approaches zero, I do not want it nearly as much, to the point I do not want it at all anymore.
ReplyDeleteI think this a great post that really highlights the diminishing marginal utility of eating candy but I also think this can applied to getting candy as well. The more doors you go up to asking for candy, you notice yourself being less excited about receiving candy each time to a point where you've grown tired of trick or treating in general.
ReplyDeleteThis post helped clear up the idea of diminishing marginal utility in a very remberable and relatable way. When I was trick or treating, I was eating my candy at the same time and had diminishing marginal utility, to the point where I didn't want to eat anymore and it made me not want to go trick or treating any more. This concept relates to really any time I eat or do an activity, as the more I do it, the less utility I will receive from it, which will cause me to not want to do it anymore.
ReplyDeleteI find it interesting how you were able to connect eating lots of candy after Halloween to economics and our utility we gain from each piece of candy we eat. I am able to relate to this because at a point, I became sick of all the candy I had. However, when we are trick or treating, we are always so greedy to get as much candy as we can and more than our friends, even though we won't really enjoy all of it due to our diminishing marginal utility. This also connects to the idea that "there is no such thing as a free lunch" because we continue to collect as much candy from each house because it was free to us, but the person handing out the candy had to pay for it.
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