Right next door to where Mitch was taking trumpet lessons was a massage parlor offering massages for the exact same price as trumpet lessons. Cam believes Mitch has been practicing the trumpet for two years now, but it turns out that Mitchell has just been getting regular massages. Utility maximization assumes that when two items are the same price, consumers will chose the item with the higher utility. While Mitch originally thought he wanted to learn how to play the trumpet, he realized each additional massage generated higher levels of utility than another trumpet lesson.
See more: equimarginal principle, marginal utility, substitutes, utility, utility maximization
Luke is finally tall enough to go on the rollercoasters and Disneyland, but Phil may be at the age where he can’t handle that pressure. The self-proclaimed “King of Rollercoasters” visibly diminishes as Luke seems to be unfazed by the G-force. While each ride adds a bit of additional joy to Phil’s overall utility, the marginal cost is clearly increasing as he continues to ride each ride. It’s not long before Phil’s marginal cost outweighs the marginal benefit of one more ride.
See more: decreasing returns, diminishing marginal returns, increasing marginal cost, marginal utility, marginal benefit, marginal cost, negative returns, utility, utility maximization
Mitch and Cam have a house guest who made breakfast using the expensive caviar that they had been saving for a special occasion. While enjoying their wonderful meal, they realize that there are all sorts of things that they have never used because they were waiting for the perfect time. This demonstrates choice paralysis. Cam and Mitch have seemingly endless choices for when to consume these special things but they never actually do. Choice paralysis says that we have a difficult time making a choice when there are too many options. As a result, we cannot chose and end up with a sub-par outcome.
See more: choice paralysis, choices, framing, positional goods, preferences, utility, utility maximization