“DEFINITION of 'Law Of Diminishing Marginal Utility' A law of economics stating that as
a person increases consumption of a product - while keeping consumption of
other products constant - there is a decline in the marginal utility that
person derives from consuming each additional unit of that product.”(As per
many textbooks and google.com)…huh?? What is It.? Well I am with you guys. I am
amongst those non-economics students for whom this topic is like an alien to
earth. After reading it for the first time my head started to spin. It always
does after reading any damn new topics of economics. I am a science lover and an
Engineer. Stuff like this suddenly makes me sleepy.
Well it’s not a rocket science in the end. It’s quite simple. It
goes as, utility is satisfaction after consuming anything, and be it a food item or any product.
Imagine, if you are a spicy pani-puri lover and you are shifted out of country by your company. Where
there is no item as such pani-puri. Remember your desire to consume it. The moment
you are back to India, the very first thing one would like to do is to go to a
local street stall and have pani-pure. The first spicy puri filled with its
spicy water and boiled potato. What kind of pleasure it may give you at that
time. That satisfaction is no bound. Now that’s utility.
After
consuming one full plate of pani puri you may want to have one more plate of
the same to compensate loss made during your stay in other country. That’s second
pani-puri plate. Later on your friend might insist you to have one more plate. That
will be third one. Then again fourth plate was insisted by someone. Now you are
totally done with your quota for pani puri and if still you are forced to have
one more plate you won’t enjoy it, that’s disutility.
If we
see, second plate may not be that much interesting as first one. Third may not
be as interesting as second one. And so on… now that’s ‘Law of Diminishing
Marginal Utility' in rough. I don’t
want to go in many details, as I am not an expert to comment on this. I am just
a management student.
Reading this topic has opened my eyes. How simple economics
topic can be actually related to life. After all, economic is not a science of
aliens. There were many questions in my mind for which ‘Law of Diminishing Marginal Utility' has given me answers. For example, why is it that the
first date of a person whom you love most will always remain in your heart (Mine
was at ‘Paratha house’ in Nagpur followed by Mr. Beans Café with my boy friend,
who is my husband now.). Why is it that first rain after heated summer is very mesmerizing?
Every drop, every breeze and seven colored rainbow of that rain is special. After five days of working hard, our weekend
is the only time where we really enjoy. Out of day Saturday is more interesting
than Sunday. If you are married then you will understand this. All the
festivals after marriage are supposed to be celebrated will full zeal and enthusiasm.
Rituals, family, gifts, love all make those all first festival post marriage
very unique. My first pay check. Oh god,
I was feeling as if I am on cloud nine. Whatever may be the amount but that
feeling of achieving something. Feeling of being on our own. First child of
your life, gives immense pleasure to explain which I have no words. Its beyond
explanation. Later on first promotion, first house,. These all ‘first’s’ of our
life always remains special. Very special. Seconds, thirds are important and
special. But the utility for the first always remains maximum. And the reason
for this is Law Of Diminishing Marginal Utility'. Keep relating economics to day to day life things and soon
economics will be fun.
In the end, stay hungry, stay foolish.
