Source: Cobden Centre
by Dr. Frank Shostak
“Mainstream economics explains the law of diminishing marginal utility in terms of the satisfaction that one derives from consuming a particular good. For instance, an individual may derive vast satisfaction from consuming one cone of ice cream. However, the satisfaction he will derive from consuming a second cone might also be great but not as great as the satisfaction derived from the first cone. The satisfaction from the consumption of a third cone is likely to diminish further, and so on. From this, mainstream economics concludes that the more of any good we consume in a given period, the less satisfaction, or utility, we derive out of each additional, or marginal, unit. … Now, in the mainstream approach there is a strong emphasis on indifference curves, which supposedly could be helpful in understanding individuals’ choices. Indifference, however, has nothing to do with individuals’ purposeful conduct.” (08/28/25)