Thus if one is concave, so is the other, in which case there is said to be diminishing marginal utility.
12.
More specifically, when making comparisons between countries, a principle called the Diminishing Marginal Utility of Income ( DMUI ) stands strong.
13.
The law of diminishing marginal utility implies that poorer people will gain more utility from money for additional spending than the wealthy.
14.
In fact, many contemporary analyses of saving and portfolio choice require stronger assumptions than diminishing marginal utility, such as the assumption of convex marginal utility.
15.
The ( indirect ) utility function for money is a nonlinear function that is concave in the positive region, reflecting the phenomenon of diminishing marginal utility.
16.
August : The law of diminishing marginal utility-- As you increase consumption of a product, there is a decline in the satisfaction gained from consuming each extra unit.
17.
A thorough-going marginalism sees marginal cost as increasing under the " law " of diminishing marginal utility, because applying resources to one application reduces their availability to other applications.
18.
Assuming consumers experience diminishing marginal utility, they will want to smooth out consumption over time, e . g . take on debt as a student and also ensure savings for retirement.
19.
However, to the extent that future generations are likely to be richer than those in the present, a positive discount rate should be applied reflecting the diminishing marginal utility of consumption.
20.
:: : Indeed, my answer on the Maths desk accounted for that . ( It's a consequence of the diminishing marginal utility of money combined with the need for a risk premium.
