When marginal utility diminishes, does total utility also diminish?
No. In the first place, “utility” is not a quantity which can be measured. The principle of marginal utility derives from the axiom of human action (where “action” is defined as “purposive behaviuor”) and the observable fact that the universality of death makes Man’s time scarce and therefore a factor to be economized. Man faces constant economic alternatives, each imposing its own opportunity costs. For this reason, acting man must prioritize his desires and economize the resources he has for best attaining his ends. The principle of marginal utility therefore declares that, for a given supply of any good or service, acting man will assign the first unit of his supply to satisfying his greatest perceived need, the second to satisfying his second need, &c. The marginal unit thus is the unit needed to satisfy the least important of acting man’s ends. But, how does one evaluate these ends? A man has several Cadillacs, but he can drive only one at a time. He keeps the second for a spare,
