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The Law of Diminishing Utility Suppose you are working outdoors, mowing the lawn on the hottest day of the summer.You are extremely hot, perspiration is
The Law of Diminishing Utility
- Suppose you are working outdoors, mowing the lawn on the hottest day of the summer.You are extremely hot, perspiration is dripping from your forehead and you would love a cold beverage.Your dad brings you a drink.Fill in the table below as to what you feel each of these drinks in succession would be worth to you (in utils).
- the first drink would be worth ____________________
- the second drink would be worth _________________
- the third drink would be worth ____________________
- the fourth drink would be worth ___________________
- the fifth drink would be worth _____________________
- Probably long before you got to the fifth drink, the value of additional ones would have reached zero.State the law of diminishing utility.
- Does the law of diminishing utility apply fully to the economic goods a person wants in general?Explain.
- If you were a merchant, how could you best adjust to the law of diminishing utilty?
- Draw a graph (quantity on the horizontal axis and utility on the vertical axis) illustrating the concept of diminishing utility.E.g., hamburgers for five year olds.
- A chip company has a slogan, "I bet you can't eat just one".What is the flaw in this advertising slogan?
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