Concept of diminishing marginal utility

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Reference no: EM133516363

Assignment:

Topic: Diminishing Marginal Utility

1. Imagine that you have just been surprised with an email that says you have been selected by your favorite pizza delivery company to receive your favorite pizza, delivered to your home and ready to eat, for lunch and for dinner every day for the next month.

  • Using the concept of diminishing marginal utility, discuss how excited you will be on the first day of your winning.
  • What about your excitement on the 10th day?
  • What about your excitement on the 30th day?

2. Now, pretend that your favorite national brand gasoline company informs you that you have won free gasoline, as much as you want, from any of their gas stations, anywhere in the country every day for a year.

  • Using the concept of diminishing marginal utility, discuss how excited you will be on the first day of your winning
  • What about your excitement on the 10th day?
  • What about your excitement on the 30th day?

3. Considering the concept of utility, what makes these two scenarios different?

4. Marginal utility is subjective. It can decrease at different rates from person to person. Further, the marginal utility of different goods and services can decrease at different rates for ourselves. Like the pizza and gasoline example, provide your own example of two different things that have different diminishing marginal utility rates for you and explain why they decrease at.

Reference no: EM133516363

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