The presentation is to simply explain one of the most fundamental, interesting and important economic theory - The Law of Diminishing Marginal Utility.

1. Law of Diminishing Marginal Utility Created by Deepali Panjabi Images from Google

2. Definition Simply put – The law of diminishing marginal utilitymeans that the first unit of consumption of a good or service yields more utility than the second and subsequent units. Created by Deepali Panjabi

3. We all experience it While total utility keep growing with each new unit, it is growing at a reduced pace meaning that each additional unit consumed, is giving lesser and lesser satisfaction. At one point in time, if consumption doesn’t stop, utility will turn to dis-utility. Created by Deepali Panjabi

4. We all experience it Remember a time when you had lots of ice cream. Now remember what each new scoop of ice cream you consumed felt like. If you never went from ‘this feels like heaven’ to ‘I think I’m going to throw up’, you probably didn’t eat enough ice cream to experience ‘dis-utility’ Created by Deepali Panjabi

5. Don’t try this at home ;) 1st Ice cream = ECSTATIC Created by Deepali Panjabi

6. Don’t try this at home ;) 1st Ice cream = ECSTATIC 2nd Ice cream = STILL ECSTATIC Created by Deepali Panjabi

7. Don’t try this at home ;) 1st Ice cream = ECSTATIC 2nd Ice cream = STILL ECSTATIC 3rd Ice cream = VERY HAPPY Created by Deepali Panjabi

8. Don’t try this at home ;) 1st Ice cream = ECSTATIC 2nd Ice cream = STILL ECSTATIC 3rd Ice cream = VERY HAPPY 4th Ice cream = HAPPY Created by Deepali Panjabi

9. Don’t try this at home ;) 1st Ice cream = ECSTATIC 2nd Ice cream = STILL ECSTATIC 3rd Ice cream = VERY HAPPY 4th Ice cream = HAPPY 5th Ice cream = STILL HAPPY Created by Deepali Panjabi

10. Don’t try this at home ;) 1st Ice cream = ECSTATIC 2nd Ice cream = STILL ECSTATIC 3rd Ice cream = VERY HAPPY 4th Ice cream = HAPPY 5th Ice cream = STILL HAPPY 6th Ice cream = NOT SO HAPPY Created by Deepali Panjabi

11. Don’t try this at home ;) 1st Ice cream = ECSTATIC 2nd Ice cream = STILL ECSTATIC 3rd Ice cream = VERY HAPPY 4th Ice cream = HAPPY 5th Ice cream = STILL HAPPY 6th Ice cream = NOT SO HAPPY 7th Ice cream = NOT HAPPY AT ALL Created by Deepali Panjabi

12. Don’t try this at home ;) 1st Ice cream = ECSTATIC 2nd Ice cream = STILL ECSTATIC 3rd Ice cream = VERY HAPPY 4th Ice cream = HAPPY 5th Ice cream = STILL HAPPY 6th Ice cream = NOT SO HAPPY 7th Ice cream = NOT HAPPY AT ALL 8th Ice cream = UNHAPPY Created by Deepali Panjabi

13. Don’t try this at home ;) 1st Ice cream = ECSTATIC 2nd Ice cream = STILL ECSTATIC 3rd Ice cream = VERY HAPPY 4th Ice cream = HAPPY 5th Ice cream = STILL HAPPY 6th Ice cream = NOT SO HAPPY 7th Ice cream = NOT HAPPY AT ALL 8th Ice cream = SAD 9th Ice cream = SICK Created by Deepali Panjabi

14. Thank You If you understood the example, you now know the Law of Diminishing Marginal Utility Created by Deepali Panjabi