The Law of Diminishing Marginal Utility
The concept of distributive efficiency is based on the law of diminishing marginal utility. According to this economic law, as a person gets more to spend, he will buy things that give him less and less utility. For example, if a person is given a gift certificate for a music download (and has no way to resell the certificate), he will use the gift certificate to purchase the song he will enjoy the most. If he is given another, we will buy his second favorite song. The process continues as long as the man keeps getting certificates for downloads. Each additional song the person buys is slightly less desirable than the one before.
Read more about this topic: Distributive Efficiency
Famous quotes containing the words law, diminishing, marginal and/or utility:
“I was not born to be forced. I will breathe after my own fashion. Let us see who is the strongest. What force has a multitude? They can only force me who obey a higher law than I.... I do not hear of men being forced to live this way or that by masses of men. What sort of life were that to live?”
—Henry David Thoreau (1817–1862)
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—Barbara Ehrenreich (b. 1941)
“In realms of knowledge, we bequeath our books,
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—Philip Larkin (1922–1986)
“Moral sensibilities are nowadays at such cross-purposes that to one man a morality is proved by its utility, while to another its utility refutes it.”
—Friedrich Nietzsche (1844–1900)