00:01
So here we're thinking about utility.
00:02
So let's think about what utility that he gets from coffee, c, and the marginal utility he gets from donuts d.
00:11
So we're thinking about one, two, three, four, five, six, and seven, say.
00:17
Each cup of coffee gives him 5 .5.
00:19
So the first cup of coffee gives him 5 .5.
00:22
The second gives him 5 .5.
00:24
The fourth gives him 5 .5.
00:26
Each and every cup of coffee gives him 5 .5 marginal utility.
00:31
Now, the donuts are different.
00:34
The first donut gives him nine, sorry, 10, the first gives him 9, 8, 7, 6, 5, and 4, and so on and so on and so forth, right? this is what his marginal utilities look like for each of the two goods.
00:48
So let's imagine his first dollar.
00:52
First dollar, he can buy either...