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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: ahhaha who wrote (82720)3/20/2001 12:09:09 PM
From: Don Lloyd  Read Replies (2) of 436258
 
Ahhaha -

...Utility can't be applied in the way you've tried since it's not measurable directly but subjective. The subjective marginal utility of money is always zero even while total utility fluctuates. Because of the lack of continuity a delta function has to be introduced in order to solve utility differential equations. When this is done the integration constants are arbitrary and can only be assigned by measurement, but utility is subjective and beyond measurement....

The fact that utility is subjective and beyond measurement makes any discussion of total utility or any mathematical treatment of utility meaningless.

Utility can only be observed in the instant that an individual actually makes a voluntary exchange. All that can be said is that for that instant he perceives a greater utility of the specific goods received than for the specific goods or money expended, and that no alternate precluded exchange would procure goods of higher utility.

...There is no law of diminishing marginal utility. That's a nonsensical concept. It's like saying, "what's the rate of change of a desire". ...

You can't mean this.

The utility of my first cup of water is that it maintains life; the utility of the hundredth cup is that it satisfies the thirst of my cat; the utility of the thousandth cup is that it helps water my lawn.

The utility of the first dollars I spend is that they provide food and shelter; the last dollars I spend provide entertainment.

Regards, Don
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