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marginal utility |
Also found in: Financial, Wikipedia, Hutchinson | 0.01 sec. |
marginal utilityIn economics, the additional satisfaction or benefit (utility) that a consumer derives from buying an additional unit of a commodity or service. The law of diminishing utility implies that utility or benefit is inversely related to the number of units already owned. For example, the marginal utility of one slice of bread offered to a family that has five slices will be great, since the family will be less hungry and the difference between five and six is proportionally significant. An extra slice offered to a family that has 30 slices will have less marginal utility, since the difference between 30 and 31 is proportionally smaller and the family's appetite may be satisfied by what it already has. The concept grew out of attempts by 19th-century economists to explain the fundamental economic reality of price. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Such taxpayers' expected marginal utilities of income fall with the amount of uncertainty, thus reducing their welfare cost of parting with a dollar. t+1] to begin with, the marginal utilities of the benefits are the same. Thus, in round 10, equating marginal utilities of investment and consumption implied choosing a level of capital stock 3 units greater than round 10 consumption. |
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