Principles of Microeconomics / Unit 5 MIC 0405 short lesson, about 20 seconds
Marginal Utility per Dollar
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The idea
Marginal utility per dollar is a good's marginal utility divided by its price: what one more dollar spent on it buys, the number to compare across goods.
In practice
Twenty utils at five dollars is four per dollar; nine at three is three.
Where people slip
Compare per dollar, never raw marginal utilities; a higher marginal utility can still be the worse buy if it costs more.
Your place on the trail
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