Syndicate
More on Buying as Much as Possible
If we were to say that the hamburger now costs $2 a slice, when the first hamburger is bought it buys you twenty units of utility, this means you only get ten units of utility per spent dollar. If the hamburger costs $2 a portion, each dollar you spent gives you less marginal utility then when the hamburgers only costs $1 each.
Let’s say for example, that since now each hamburger costs $2, when you bought the first one and it gave you twenty units of utility, you only obtain ten units of utility per dollar that was spent. In the same way, while the second hamburger still gives you sixteen units of happiness utility, since it now costs $2 in these units of utility, your marginal utility per dollar is now only eight units of utility.
Now we are going to look at a chart of jars of orange juice. In this case our total utility, marginal utility per dollar when you drink a jar is of $2 per jar.
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