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
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