Final answer:
Declining Marginal Utility describes the phenomenon where each additional unit of a product consumed provides less utility than the previous one, exemplified by the lower satisfaction obtained from subsequent T-shirts after the first one.
Step-by-step explanation:
The term that describes a situation where consumers already have one unit of an item and as a result place a lower value on an additional unit is Declining Marginal Utility. This concept indicates that as a consumer consumes more units of a given good, the addition to utility that each new unit brings decreases.
For instance, if José obtains significant satisfaction, or utility, from his first T-shirt, symbolized by 22 utils, he may find the fourth T-shirt he gets, which he may only use when his other clothes are dirty, to provide him with only 18 additional utils.
This is a practical example of the law of diminishing marginal utility, which suggests that the utility gained from each additional unit consumed is less than that from the previous one. It is part of the broader law of diminishing returns, which states that adding more of a resource to the production of a good will ultimately yield lower incremental gains.