Principles of Economics Assignment: Utility and Pizza Example

This assignment explores the concept of diminishing marginal utility using a relatable example of consuming pizza. The student describes how the utility derived from each slice of pizza decreases as they eat more. The first slice provides the highest level of satisfaction, while subsequent slices offer progressively less satisfaction due to satiation. The student explains that the fourth slice provides marginal utility, and the fifth slice results in negative utility. The assignment demonstrates how the principle of diminishing marginal utility, where the additional satisfaction from consuming an additional unit of a good decreases, applies to this scenario. The student references OpenStax's Principles of Economics to support the analysis.

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Student’s Name
Institutional Affiliation

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There was this time I was hungry and decided to buy myself five slices of pizza with each
selling at $3. I started eating them right away. After eating the first slice of pizza, I gained a
positive utility. Since I was hungry, the first slice of pizza I consumed tends to have high value to
me. This is because when I consumed the second slice, I had nearly satisfied my appetite by the
first slice. Because I was not hungry as before, I did not enjoy the second slice of pizza like the
first one. This continued to the third slice. It had less utility since at this point I had satisfied my
hunger (OpenStax, 2016).
When I turned to the fourth slice, just like the third slice it had also undergone
diminishing marginal utility. Consuming it was difficult because I was experiencing discomfort
in my stomach from already being full. Finally, I was unable to consume the fifth slice. This is
because the first four slices had made me so full hence making the fifth slice to be a negative
utility (OpenStax, 2016). The decreasing utility that is often experienced when any product is
being consumed is demonstrated by my encounter with five slices of pizza.

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Reference
OpenStax (2016). Principles of Economics. Rice University.