Marginal utility of money

Can you cite you sources for this?

 

If you are considering a $100 bill as the marginal unit it would be. But at no time do they say they are actually considering that as the marginal unit. I guess you don't understand what you read well. At one part of Reisman's text he gave us the description of what happens when the marginal unit remains small and insignificant with that blurb about the $100 bill lighting the cigar. At another part of Reisman's text he mentions the conversation with Von Mises. Thus there is no connection between what Von Mises said and the $100 bill example.

Amazing how you can take one part of an example which is clearly about the human behavior of a millionaire and all you can think about is the insignificant sum of $100 (to the rich man) instead of the act of the man. That example is clearly a description of what happens when the marginal unit of a GIVEN SIZE is used as wealth increases thus resulting in a diminished marginal utility. Of course this is why Reisman says we DON'T USE A MARGINAL UNIT OF A GIVEN SIZE as he clearly tells us as wealth increases the size of the marginal unit increases in size thus we can have an increase in marginal utility. A millionaire will never consider $100 as the marginal unit of money. That would be absurd.

Like I said before, WHEN AND IF you can read and understand economics, maybe then we can have a discussion about the subject.

 

I have done so many times in the original thread. Go back and look.

 

I was referring to your claim regarding budget deficits and budget surpluses:

 

As was I. The page you are quoting is talking about an on-budget surplus without discussing the larger off-budget deficit and the net total deficit is abut $17 billion.

 

So what would the marginal unit be when dealing with a $100 bill?

What would the marginal unit be in the story of the millionaire using a $100 bill to light a cigar, surely you can supply us with that, given your graduate level work in economics.....perhaps CaliforniaCracker or GPerreault, those other economic experts who back you up so often, would stop by and give us the proper marginal unit ....

 

Since I and the millionaire are not the player using $100 as a marginal unit I have no way of knowing. It is the player's per perception to chose the size of the marginal unit.

I expect that either one could give you the facts, buy since I am here and you directed to quote to me, I will answer. Since it is the millionaires choice as to what to consider as the proper amount of the marginal unit. No one else can do so.

What we do know, based on that example of what happens if you choose in insignificant sized marginal unit like $100 the perception that it is an insignificant amount and more pleasure can be gained lighting a cigar than using that insignificant amount of money as a marginal unit.

Even though a poor man might see $100 as a positive marginal utility with which to buy food, it is irrelevant to the millionaire whose marginal units are likely to be $50 K or higher.

BTW, your implication that either of the other two are screen names of mine is absurd. You are accusing me of breaking the rules, which I have not done.

 

The actual answer is $100, thank you for playing....

 

Not for the rich man it isn't; not by the hair on your chiny chin chin. If you ever figure out that the $100 bill IS NOT THE MARGINAL UNIT, let me know. No millionaire (about whom the blurb about the $100 bill) would consider $100 as the marginal unit.

I guess you are so poor you consider $100 a lot of money.

When are you going to learn what marginal utility is all about?

 

Unlike you, I actually took courses in economics.
I know what a marginal unit is, unlike you, and the fun factor of watching you struggle with that concept has worn out.
When Reisman quotes Mises says the size of the marginal unit is the size of whats being dealt with, that is exactly what he means.
If you are dealing with a yacht, the size of the marginal unit is the cost of the yacht, if you are dealing with a $100 bill, the size of the marginal unit is $100.
Why do you think that you have been unable to give the size of the marginal unit? It's because you simply don't understand what Reisman, Mises or Krugman for taht matter mean by "marginal unit".

 

If you know about marginal utility, why did you say the $100 was the marginal unit? In that example it was obvious that was not the unit under consideration. It clearly demonstrates WHY THE RICH MAN WOULD NEVER USE SUCH AN INSIGNIFICANT amount of money as his marginal unit.

They were not talking about that example when he brought up Mises.

Only if you are looking for a unit so small it has no marginal utility for the rich man.

No only do I know what marginal utility is all about, it is absurd to believe what you do about that $100 bill which was so insignificant to the millionaire he got more pleasure from burning it than to consider it as money. You completely missed the point of the entire example. If as you say you took economics, you need to get your tuition back as you obviously do not understand even the rudiments of the subject. You not only struggle, you get it wrong when you do.

I feel sorry for you and a few other people who tried so hard to prove me wrong, especially since the quotes I posted in all of their context has proved me right every time.

 

I sense the likely hood that you are terribly embarrassed by having dug your hole so deep with misinformation that now all you can hope for is for the subject to be ignored. If I am not correct, you should go back to Reisman's book available in PDF on the internet at www.mises.org/books/capitalism.pdfStart at page 49. This time, please try to understand what he is saying.

 

Naptime! You can come back now and try to save face while I am gone.

 

An on budget surplus is still a surplus and the only one an administration has had since the 1970s.

How does your concept of marginal utility account for artificial persons?

 

When the government owes more money in new debt borrowed to spend on the on budget side than the surplus in the on-budget side the net result is a deficit. I have always admired Clinton and agree he was the best fiscal president since Eisenhower. But he still had a net total deficit every year he was in office.

I do not have a concept about marginal utility for artificial persons. Marginal utility is a perception of personal satisfaction. Do you believe "artificial persons" can have personal satisfaction?

 

BTW Goober, your bringing Paul Krugman into this really makes your crap look weak. His soak the rich is no different than Saez and Diamond. At least those two skewed up a study to make their call of draconian taxation look legitimate.

No matter, you are still wrong. Reisman has never bought into the diminishing marginal utility of money like the left wingers want. And you people wonder why moderate democrats are as likely to vote the left wingers out of office. We are called blue dogs, not yellow dogs like the left wing nuts.

 

Debt and deficits are two different things, as you yourself must have noticed by your use of those labels to mean two different things. We can have debt and still have a budget surplus.

I believe artificial persons must be taken into account regarding marginal utility; and, the diminishing marginal utility covers the concept of artificial persons.

Simply claiming the evolution of an increase in wealth serves the same purpose could be misleading.

 

Are you using my name in vain? Why try to get me into your petty argument about the 100 bill? There is no doubt you haven't a clue so I don't have to get involved. Should you need help explaining a more complicated aspect of economics I shall be happy to help.

 

So this is amazing, another person who claims to be an expert on economics can not name the marginal unit in an example dealing with a $100 bill.....
I mean, what are the odds?

 

So if, for purposes of comparing relative marginal utility, you can increase the size of the marginal unit, then how can you say that it is marginally less for a wealth person?

If you can change the relative marginal unit you are comparing, and the marginal unit is $1 to the starving man, what is the marginal unit for a wealth person compared to a starving person? How do you tell? How can you compare different sized marginal units?

If the marginal unit is $999,999,999 to the billionaire, wouldn't that have greater marginal utility to the billionaire than $1 would to the person making $10,000? why not?

I asked these questions to dnsmith and he simply ignored them. Since you've popped in to defend dnsmith's interpretation, maybe you can address these questions.

 

One doesn't say that. Common sense Iriemon, why not use some?

Since marginal utility is a strictly personal issue one never compares marginal units between individuals.

Silly question! It doesn't matter what the marginal unit is to the billionaire to be compared to any marginal unit of a less wealthy person.

I am sure he could, but your claim I didn't address those issues is incorrect. I have on several occasions posted that one cannot compare two personally perceived situations between people. The billionaires MU and the less wealthy MU CANNOT BE COMPARED OR MEASURED.

 

No matter how much some people disagree about what Reisman said, it is clear that he believes that as wealth goes up, marginal unit size goes up, thus the marginal utility can increase.

There are other economists who disagree. I get that, I just don't believe they are right. Common sense dictates that a wealthy person will never consider a small valued marginal unit such that marginal utility could diminish in his perception. Common sense also dictates that since man tends to desire limitless wealth getting such wealth in larger marginal unit chunks will satisfy that man so long as those marginal units are significant.

Trying to suggest that the example of the millionaire lighting a cigar with a $100 bill supports the theory that the marginal utility of money always diminishes is to miss the point of the example. Which follows Reisman's description of a given small size marginal unit having a diminishing marginal utility makes that $100 bill such an insignificant amount of money it serves no utility to the millionaire, thus it is important that as wealth increases the size of the marginal unit increases in value and the marginal utility of that unit of wealth can increase.

 

Not for the record: My response to this post was deleted by the mod.

 

I suspect because you were either insulting me or falsely accusing me of something incorrect.

 

The odds are 100%. Unless you are the person considering the marginal unit it can't be determined. As to claiming to being an expert, those are your words, and you sir are no expert.

One of you was questioning how I showed up on this forum using Reisman's comments. That is an easy question to answer. For the first week or so all I did was click on the new activity button and read the posts. It didn't take long for me to see a couple of people talking out their rear end on the subject. (present company included) so I dug back into my book Capitalism by Reisman and initially quoted the entire chapter on the Law of Diminishing Utility and admonished dnsmith for something he wrote. If that distresses you so be it. I don't think of you as important enough to waste time on.