Final answer:
Marginal utility is the added satisfaction received from consuming an additional unit of a good, and it tends to decrease with each unit consumed. This concept, delineated by the law of diminishing marginal utility, underpins marginal analysis and explains incremental consumption behavior.
Step-by-step explanation:
Understanding Marginal Utility
The concept of marginal utility is fundamental to understanding consumer behavior in economics. It refers to the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service. According to the law of diminishing marginal utility, as a consumer consumes more units of a good, the utility gained from each additional unit decreases. For instance, if José's first T-shirt, which was his favorite, added 22 utils to his satisfaction, the utility he gains from subsequent T-shirts may be less because each one is valued slightly less than the previous one. Eventually, such as with the fourth T-shirt which only adds 18 utils, he reaches a point where a T-shirt becomes just a necessity rather than a source of great satisfaction. This phenomenon is part of marginal analysis and is crucial for understanding why people make incremental choices in consumption and resource allocation, rather than extreme all-or-nothing decisions.