Businesses really do care about your happiness and satisfaction—as long it's higher than their marginal cost. Discover how relative scarcity, marginal utility, and the subjective tastes of consumers determine the price a business places on an item.

Concepts

microeconomics, supply and demand, equilibrium prices, marginal analysis

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Additional Tags

social studies

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Instructional Ideas

• Prompt learners to choose one aspect of their daily life to analyze the marginal utility, such as watching their favorite show or playing a sport
• Incorporate into a math lesson with the graph at 4:55
• Have pairs create their own graph depicting the Law of Diminishing Marginal Utility based on a company they purchase from or restaurant they frequent, or showing the elasticity of supply and demand for their favorite product

Classroom Considerations

• Comment section is open to the public and features differing opinions from commenters
• Because the video moves quickly and features a lot of important points, you may want to pause periodically and lead the class in a discussion

• This video is hosted on YouTube

Pros

• Uses applicable and understandable examples to illustrate the main point, including the Diamond Water Paradox and fluctuating gas prices

Cons

• None