Principle of diminishing marginal utility:
It states that more of a good that one obtains in a specific period of time the less is the additional utility derived from an additional unit of that good ,so the shorter the time the more quickly marginal utility diminishes. The rate at which marginal utility deminishes depends upon individual taste and preferences .
For example,
Once I went to a party with a group of friends .One of my friends were very keen to have the hot Gulab Jamun that were being served on the counters. Since it was a buffet,he said he can eat up to 5 Gulab jamuns at a time.After the dinner we all went to the counter and he ordered a plate containing two pieces, after that he ordered another plate.
After having four Gulab Jamun he said that he can't have the fifth one. We cheered him up but he still said that he is so full and so satisfied that he doesn't want another. Every time he has a Gulab Jamun the utility of every additional Gulab Jamun decreases and finally he is unable to have the last one and the utility that he derives from the last one is almost zero and he decides not to have it.
Economics when applied to real life sounds beautiful. this blog is for those students who are discovering the different facets of economics applications and want to share their discoveries.
Saturday, September 1, 2018
Marginal Utility in Real Life
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