3 ms·
Back in my youth I didn't "get" this the marginal utility of a dollar. I was also a libertarian and Ron Paul supporter. How naive I was.
by whamlastxmas 7y ago
Back in my youth I didn't "get" this the marginal utility of a dollar. I was also a libertarian and Ron Paul supporter. How naive I was.
- alexmingoia 7y agoThe law of diminishing marginal utility refers to homogenous goods. The marginal utility of the dollar only has meaning in the context of a particular good or service. Whether someone earns $20,000/year or $200,000/year says nothing about the marginal utility of dollars with respect to a particular good or service. The diminishing marginal utility of dollars is the same with respect to a gallon of milk for example, whether one has $20,000 or $200,000. I’d also like to point out that “utility” is subjective. There are serious methodological shortcomings with quantifying the subjective satisfaction of various goods and services, particularly heterogenous goods like housing.