From the Document
Allocating Income to Maximize Utility
1. A consumer should choose the product that gives the most utility for the money.
2. This means using the marginal utility per dollar spent as the correct measure for comparing the utility gained from various goods.
Here's my take:
One thing that I try to avoid at all costs is purchasing clothes from online retailers. When shopping at a mall, I can try on an item of clothing before purchasing it to make sure it fits. However, when shopping online, I can't do the same. If I do purchase something and it does not fit, I'm then responsible for going through the trouble of shipping it back for a refund. This uncertainty about the fit lowers the anticipated marginal utility from buying online.
Of course, to address this problem, if I have to purchase online, I only buy from website's that offer a
virtual 3D model of the product. Online retailers that have this option allow me to enter my height, weight, and various size measurements. The website then automatically adjusts the size of the clothes to match my body's parameters. This allows me to see how well a particular shirt or pants are likely to fit from miles away. Therefore, this feature reduces the uncertainty about how well cloths fit, and increases my marginal utility of any given quantity I consider buying at any price.
Hope that example helps!
Please mark as solved if satisfied -- also locks the answer from others.
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