Description 
Max is sitting next to Marge’s Ostrich 
Burger cart, and he is eating a stack of 
ostrich burgers. As Max is eating, a 
“utility meter” is attached to Max’s head 
to measure the utility he receives from 
eating each burger. The narrator 
discusses Max's utility as the utility 
meter displays the utility Max receives 
from eating each burger. As Max finishes 
his last burger, the narrator explains that 
Max has discovered the concept of 
diminishing marginal utility.

Audio Transcript 

Narrator:  
Max is a typical kid and when he gets hungry, he needs to eat. 

Max: 
I'm really hungry. I could eat a bunch of burgers. 

Narrator: 
Max eats burgers because they satisfy his hunger. In other words, he derives benefit from them. In Economics, we call that benefit "utility."   Suppose we could measure the utility Max gets from eating Ostrich Burgers. 

Narrator: 
We might invent some sort of utility meter that we could attach to Max's head. This meter would measure Utility in  "Utils". 

Narrator: 
Max thoroughly enjoys his first burger,...and the utility meter shows a very high reading. Wow! Thirty Utils! 

Narrator: 
When Max eats his second burger, he's not as hungry, so his utility from eating the second burger is less than the first. His total utility increased, but he didn't get as much utility from the second burger as he did from the first. 

Narrator: 
Max is experiencing diminishing marginal utility. In other words, each additional burger adds less and less to his total utility, until finally he derives no additional benefit from eating another burger. 

Narrator: 
If we add a column in the table for marginal utility, we see how the value decreases with each additional burger. 

Narrator: 
Marginal measures are important in economics. They are a way of describing change. If we plot a graph of Max's Total Utility, we see that the total utility keeps increasing with each additional burger  but that  the amount of increase gets smaller each time. 

Narrator: 
This change in total utility is the marginal utility. By plotting values for marginal utility we see how the rate of change decreases with each burger. 

Narrator: 
The last  burger wasn't nearly as good as the first one. As Max consumed more and more units of the commodity, each successive unit brought Max less added satisfaction. 

--End--           Back