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Consumer Choice and Utility Maximization

Topic 1 Discussion topic: Diminishing Marginal Utility

Pretend that you have just been surprised with a genuine e-mail that says you have just been selected by your favorite pizza delivery company that every day for the next month you will receive your favorite pizza for lunch and another of that same favorite pizza for dinner, delivered to your home and ready to eat.
Using the concept of diminishing marginal utility, discuss how excited you will be on the first day of your winning.
What about your excitement on the 10th day?
What about your excitement on the 30th day?
Now, pretend that your favorite national brand gasoline company informs you that you have won as much as you want free gasoline, as much as you want, from any of their gas stations, anywhere in the country every day for a year.
Using the concept of diminishing marginal utility, discuss how excited you will be on the first day of your winning.
What about your excitement on the 10th day?
What about your excitement on the 30th day?
Again, considering the concept of utility, what makes these two scenarios different?

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