After Viewing The Video Clip From Cool Hand Luke, First Conv

After viewing the video clip from Cool Hand Luke, first consider how marginal benefits and marginal costs fit in to Luke’s decision, and how the concept of diminishing marginal utility is at work as Luke eats more and more eggs. What is driving his marginal benefits to continue to exceed his marginal cost? Consider how Luke’s decision would change if he had to actually pay for each egg he eats. How would this affect his choice to continue eating? Consider the concept of marginal utility per dollar spent (i.e., MU/p) and how it affects the consumption decisions we make. Have you ever had a time where you actually bought your second choice rather than your first choice? That is, can you think of a time where it wasn't only about marginal utility for you, but about marginal utility per dollar spent? Explain. 275 words APA 3 sources

The scene from Cool Hand Luke vividly illustrates key principles of microeconomics, particularly the concepts of marginal benefits, marginal costs, and diminishing marginal utility. As Luke continues to eat eggs, each additional egg provides him with a certain level of satisfaction or benefit, which initially outweighs the marginal cost, often interpreted as the effort or discomfort of eating more eggs. This is consistent with the economic principle that marginal utility, or the additional satisfaction gained from consuming one more unit, decreases as consumption increases, a concept known as diminishing marginal utility (Mankiw, 2018).

Luke’s decision to keep eating is driven by the fact that his marginal benefit exceeds his marginal cost at each step. The psychological and social aspects—such as his desire to rebel, impress others, or simply prove a point—also elevate his perceived benefits, making the incremental utility higher than it would be under normal circumstances. When these benefits are primarily psychological, the diminishing utility may initially appear less significant (Deaton & Muellbauer, 1980). However, if Luke had to pay for each egg, his decision would likely shift. The incremental cost of each additional egg would begin to outweigh the marginal benefit sooner, leading him to stop sooner to maximize net utility (Varian, 2014).

The concept of marginal utility per dollar (MU/p) offers insight into real-world consumption behavior. Consumers typically allocate their limited budgets to maximize total utility by comparing the marginal utility they receive from each good relative to its price (Samuelson & Nordhaus, 2010). For example, I once chose to buy a slightly more expensive but more satisfying coffee over a cheaper alternative. The higher MU/p of the premium coffee justified the additional expense, aligning with the principle that consumers seek to maximize utility per dollar spent (Hicks, 1939). This decision made sense because the pleasure I derived from the premium coffee was proportional to its cost, guiding my choice toward the option offering the highest marginal utility per dollar. Thus, in everyday decisions, marginal utility per dollar plays a pivotal role, influencing consumers to prioritize options that offer the greatest satisfaction relative to their costs.

References

• Deaton, A., & Muellbauer, J. (1980). An Almost Ideal Demand System. The American Economic Review, 70(3), 312-326.
• Hicks, J. R. (1939). Value and Capital. Clarendon Press.
• Mankiw, N. G. (2018). Principles of Economics (8th ed.). Cengage Learning.
• Samuels, W. J., & Nordhaus, W. D. (2010). Economics (19th Edition). McGraw-Hill Education.
• Varian, H. R. (2014). Intermediate Microeconomics: A Modern Approach (9th ed.). W.W. Norton & Company.