Examples of Diminishing Marginal Utility

Examples of Diminishing Marginal Utility

Free Buffet

Remember the last week when I went for a vacation in Tamsui Fisherman's Wharf, I booked the accommodations in Fullon Hotel. The breakfast was included and free. Unfortunately, because of the coronavirus(COV-19), their breakfast buffet has been canceled. So, while I checked in, the staff asked me what would I like for breakfast, Chinese cuisine, or western meals, and they will deliver it to my room in the morning. I wasn't sure how much the portion of their meals, so I ordered both of the two. The next morning when the staff knocked on my door for my breakfast, I was surprised. There are so many foods in front of me and I didn't know where to start. After I ate many pieces of bread and fruits, I started to feel my stomach might gonna blow. Every piece of the delicious bread was very enjoyed at the beginning, but it became less and less enjoyable. It feels like my stomach and tongue sent my brain a signal when too much breakfast has been consumed. Although the breakfast was the best that I have ever eat in my life, the marginal utility was diminishing as my stomach was full. My amazing level falls from 100% to even close to negative during the very first bite to the last one.

Too Much Sleep

Another example of the law of diminishing marginal utility is about sleeping. We all need some rest while we are tired. Enough sleep is good for our study and helps us to keep healthy. But what happens if we get too much sleep? Remember the last week, a time when I was lying on my bed. I was clearly awake, but I did not want to leave my comfortable and adorable little bed. So I decided to keep lying and closed my eyes to enjoy this relaxing moment. But as I closed my eyes, I could not fall asleep. Instead, I started to think about those things I want to do. Finally, I left my bed and went to meet my friends. In this case, it clearly shows that the highest util of sleep is when I was very tired. As the time pass, I have got enough sleep, it became less and less necessary.

Exceptions Situations

The law of diminishing marginal utility states that as more goods or services are consumed, the utility derived from them will fall. Nonetheless, there are some exceptions to this law. In some situations, consumers gain more utility as more and more of a good is consumed. One of them is personal hobbies such as antique collection, or savings in a bank. The satisfaction increases when a new antique or more money is collected or saved. For instance, when we set a saving goal such as $1,000,000 we gain more and more utility as we save more and more to achieve that goal. 

Reference

OpenStax College. (2016). Principles of economics. http://cnx.org/contents/69619d2b-68f0-44b0-b074-a9b2bf90b2c6@11.330