Is money an exception to the "Law of Diminishing Utility"?Explain in detail and provide real world scenarios

Question

I just need little help to understand it ,,and if u can not help me just give me and wesite or anything that i can refer to it,,or just explain to me what is this law ,,?? thanks

Answer 1

SEE SEN & DREZE  4 MORE DETAILS,SEE POLITICS AND ECONOMICS R INTERLINKED FAME GIVES MOR EMONEY AND VICE-VERSA BUT CONSUMPTION-SAVING PATTERNS from income from wealth indicate the explanation i gave earlier u know law of dimm m.u. need not hold for any product why only money, so it's an exeption, however in general it's not if u cosider super rich; beware of popular contentions see stories of richest peple and ask why why why

some people even believe money is veil if so it should obey more tahn many other commodities

Answer 2

Law of Diminishing Marginal Utility:

According to Alfred Marshall, it is thus : '' The additional benefit which a person derives from a given increase of his stocks of anything diminishes with the growth of the stock he already has.''

No, money is not an exception to the Law of Diminishing Marginal Utility.

The critics argue that when a person acquires more and more money, he can acquire more and more goods, and thus attain more and more satisfaction. Further, he can get social status, political power and influence. So, the more money a person gets, the more is the additional uitlity he derives from the additional unit of money.

But this contention is wrong. This is because, when a person earns more and more money, he spends his additional money on the consumption of comforts and luxuries, which may not give him so much utility as the basic necessaries. That means, the additional utility derived from the additional unit of money diminishes. Again, a man who gets more money does not bother about the price of goods and services, i.e. the larger the amount of money he has, the lesser is the value of money for him (the marginal utility becomes less).

So, money is also subject to the Law of Diminishing Marginal Utility.

For example, if I have 200 bucks, I wouldn't mind buying something costing 100 bucks, because I have the money to spare (i.e. the value of money diminishes in my eyes).

However, if I had only 120 bucks, I would be a little reluctant to part with 100 bucks for the commodity, simply because the value of money would be more for me (because I have a limited/less amount of money).

From the various studies of the law's criticisms and their answers, one can conclude that this law does not have any limitations or exceptions. It applies to all cases of consumption, as long as the various assumptions are fulfilled.

Assumptions:

1) The units consumed must be identical in all respects (like color, taste, size, quality).

2) The units consumed must be reasonably large.

3) There must not be a time-gap between the consumption of one unit and the consumption of the other.

4) Rationality of the individual must be present.

5) The price of the commodity consumed and the income of the individual must remain constant.

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Answer 3

You should really do your own homework.