1. How do you know when one more is too much?

2. Marshmallow Activity Why did you stop buying marshmallows?
How many more marshmallows will you eat at a price of zero?

3. Marginal utility is the extra value or additional satisfaction a consumer obtains from consuming one additional unit of output.
What happened to each student’s total satisfaction with each marshmallow purchased and eaten?
What happened to the additional satisfaction or marginal utility as more marshmallows were purchased and eaten?

4. Diminishing marginal utility is when the additional satisfaction or marginal utility associated with consuming additional units of the same product in a given amount of time eventually declines.

5. Think of the following examples in relation to the quantity purchased considering diminishing marginal utility

6. Marginal analysis is a decision-making tool for comparing the additional or marginal benefits of a course of action to the additional or marginal costs.

7. Watch the following video

8. How does marginal analysis affect your decision making:

9. Review What is Marginal Utility Explain Diminishing Marginal Utility
What is Marginal analysis

10. Glove Factory Example Tape off 36x48” area
Two pairs of scissors two pens and paper
One desk in the middle with supplies
One worker to start
Track number of workers & gloves produced
Go for one minute and stop

11. Glove Production Table
Number of Workers
(1)
Number of Gloves Produced
(2)
(3)
(4)
(5)

12. Add another worker

13. Glove Production Table
New Category
Glove Production Table
Number of Workers
(1)
Number of Gloves Produced
(2)
Marginal Product
(3)
(4)
(5)

14. Marginal product is the additional output produced by each successive unit of an input.

15. Add a third worker
What is the marginal product of the 2nd and 3rd workers
Then a 3rd, 4th, 5th, 6th, 7th, 8th 9th while tracking the results

16. Glove Production Table
Number of Workers
(1)
Number of Gloves Produced
(2)
Marginal Product
(3)
Value of Additional Gloves Produced
(4)
Marginal Cost of Labor (1 min worked)
(5) ?
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17. The law of diminishing returns states that as more units of a variable input are added to one or more fixed inputs, eventually the number of additional units of output produced will begin to fall.

18. Marginal cost is the increase in a producer’s total cost when it increases its output by one unit.