How many doughnuts can YOU eat? If I gave you a dozen Broad Street Dough Co. doughnuts you would definitely eat one, and maybe two. But after that your satisfaction level for each doughnut would start to go down. In economics we call this diminishing marginal utility. Your marginal utility is the satisfaction you gain from eating each doughnut. Maybe you would give the first one a marginal score of 10, and the second one a score of 9. So the second doughnut isn't quite as amazing as the first, but it adds to the satisfaction of the first. Both doughnuts together give you a combined, or total utility, of 19 points. If you keep eating doughnuts, your satisfaction per-doughnut will continue to go down (I hope).
The law of diminishing marginal utility helps explain why the demand curve is downward sloping. If successive units of a good yield smaller and smaller amounts of additional utility, then the consumer will buy additional units of that good only if the price falls.
In today's video lesson the Khan Academy is going to take you through the concept of marginal utility (again), and how to equalize marginal utility per dollar spent. After viewing the two videos, you will practice using the set of problems. Please write your answers to the problems on a separate sheet of paper, so the substitute can collect it. The link below is the the problem set.
https://docs.google.com/a/Oceanschools.org/document/d/1_BbeJkORiOMZzIwYTbT3pbljQuzTabHDuH24hEa0jg8/edit?usp=sharing
The law of diminishing marginal utility helps explain why the demand curve is downward sloping. If successive units of a good yield smaller and smaller amounts of additional utility, then the consumer will buy additional units of that good only if the price falls.
In today's video lesson the Khan Academy is going to take you through the concept of marginal utility (again), and how to equalize marginal utility per dollar spent. After viewing the two videos, you will practice using the set of problems. Please write your answers to the problems on a separate sheet of paper, so the substitute can collect it. The link below is the the problem set.
https://docs.google.com/a/Oceanschools.org/document/d/1_BbeJkORiOMZzIwYTbT3pbljQuzTabHDuH24hEa0jg8/edit?usp=sharing