The 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 s

The 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.