Economics, Random Thoughts

Marriage Bill and the Law of Diminishing Marginal Utility

Utility is a very interesting concept in economics. Essentially it can be used to mean preferences. We prefer some things over others. Going to shop, an individual will pick one brand of say bread over another, or a loaf of bread over cake. In economics you can say that the utility of bread is more than the utility of cake.

Now, if you have not eaten bread for some time, you will really enjoy the first bread than if you had eaten some earlier. Each time you eat bread after eating it previously you will probably enjoy the bread less and less. You can generalize this for anything you like. In economics this is called the law of diminishing marginal utility. It can be represented by the graph below.

New Picture

Red line: represents Preference

Blue Line: represents Enjoyment derived from additional Q

You will note that while you prefer more loafs of bread than few (Red Line), you enjoy more and more                                                               bread less (you might even end up throwing some)

Suppose that the cost of a loaf of bread goes up, everything else remaining constant. The most likely reaction will be to reduce spending on bread. If you were buying two loafs, you might consider buying one etc etc.

Put differently; it would be cool to have a loaf of bread if you do not have one already, if you do, then its also great to have another, but having the one already, you do not enjoy having the second one as you did while getting the first, and if, perchance, the cost of buying a loaf increases, then you are less likely to buy a second.

Looking at this concept in the light of the new law on polygamous marriages, from an economics point of view, It would be preferable for men to marry many wives, however, for each additional wife, the man enjoys less of the women; and the additional lady is slightly less valued. And if the cost of living rises, the man is likely to dispense with one of the ladies.

And there it is; my three pence thought!