Mary Jane Sudekum, Pharm.D., and Lee C. Vermeulen, M.S. Key Words: therapeutic interchange, guidelines, drug policies, drug. procedures, pharmacy and therapeutics committee, patient care, cost-effective. therapy, American College of Clinical Pharmacy, ACCP, position statement.
The law of diminishing marginal utility is similar to the law of diminishing returns which states that as the amount of one factor of production increases as all other factors of production are held the same, the marginal return (extra output gained by adding an extra unit) decreases.
Proposition 3 is intuitively appealing. If the elasticity of marginal utility of relative wealth is greater than the elasticity of marginal utility of consumption, poor individuals get a lot more pleasure from moving up the social ladder than from consumption, so they have a strong incentive to save.