Things that you like, use, or think you might use give you satisfaction. Your satisfaction rises...

 

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Things that you like, use, or think you might use give you satisfaction. Your satisfaction rises with each unit you buy, but the amount of additional satisfaction, or marginal utility, diminishes with each additional unit. Answer these questions about the following example: Suppose you normally buy five sandwiches for $3.25 each during a school week. If you had unlimited money, how many would you buy? 10, 20, 30? (1) If you bought three and ate them in one sitting, which would you enjoy the most: the first, the second, or the third? (2) What effect would a drop in the price of sandwiches have on your enjoyment of the third sandwich? (3) Things that you like, use, or think you might use give you satisfaction. Your satisfaction rises with each unit you buy, but the amount of additional satisfaction, or marginal utility, diminishes with each additional unit. Answer these questions about the following example: Suppose you normally buy five sandwiches for $3.25 each during a school week. If you had unlimited money, how many would you buy? 10, 20, 30? (1) If you bought three and ate them in one sitting, which would you enjoy the most: the first, the second, or the third? (2) What effect would a drop in the price of sandwiches have on your enjoyment of the third sandwich? (3)

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Applying the Law of Diminishing Marginal Utility to Sandwiches 1 Most Enjoyable Sandwich Assuming th... View the full answer