ECON 103 Lecture Notes - Lecture 4: Peanut Butter, Equilibrium Point, Budget Constraint
13 Jan 2022
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The third principle in economics: diminishing marginal value the last assumption of our human tastes . Diminishing means decline and marginal means the next one of. So, what diminishing marginal value means your additional unit"s value is falling in a more formal way of saying it will be. The maximum one is the willing to sacrifice at the margin (additional) for good, per unit of time, declines the more one has of that good other things held constant (everything about you stay the same). And absolute the marginal value can be negative in which people will pay you to do something. Money will not have marginal value because money is not goods and money is just the count for goods, when you have more money it just means that you will have more resource to consume more goods. The more you have the less happy you are because it is driving the marginal value to zero.
