Does a dollar given to a rich person raise the rich person’s total utility more than a dollar given to a poor person raises the poor person’s total utility?

tang ina gago!!!!

ewan

Whether a dollar given to a rich person raises their total utility more than a dollar given to a poor person raises their total utility depends on various factors, including the concept of diminishing marginal utility.

To understand this concept, let's start by explaining utility. Utility refers to the satisfaction or happiness that a person derives from consuming goods or services. However, the level of utility a person gains from each additional unit of a good or service tends to decrease as they consume more of it. This is known as diminishing marginal utility.

Now, when it comes to the impact of a dollar on a rich person versus a poor person, we can consider the principle of diminishing marginal utility in two ways:

1. Absolute vs. Relative Utility: A dollar may have a higher absolute value to a poor person as it represents a greater portion of their total wealth and can typically satisfy more immediate needs. It can contribute significantly to their overall utility and well-being.

2. Marginal Utility: However, in terms of marginal utility, the rich person may experience a lower increase in overall utility from an additional dollar due to diminishing marginal utility. Since the rich person already has a higher level of wealth and access to a wide range of goods and services, the additional dollar may not significantly impact their overall satisfaction or happiness.

To conclude, while a dollar can indeed make a substantial difference in the utility of a poor person's life, the same dollar may not noticeably affect the rich person's overall utility due to diminishing marginal utility. However, it is important to consider that utility is a subjective concept, and individual circumstances may vary.