00:01
So here we are trying to use our economic principles of total utility, marginal utility, to understand the common conception or misconception, however you believe, that money can buy happiness or becoming richer, making you happy.
00:16
So according to one study or one paradox, it states that higher incomes do not necessarily make people happier.
00:23
Now, this is based upon the fact that through their studies, in terms of utility and happiness, they said that going from rich to rich to rich, richer provides the same amount of happiness as going from poor to less poor.
00:36
Now, this is kind of maybe confusing at first, but when you think about it, we can use total utility.
00:42
So going from rich to richer and poor to less poor, you're still going to be gaining total utility because your money can buy more.
00:51
And that's the key here.
00:52
But additionally, there's marginal utility.
00:55
And marginal utility is the difference in utility as you go up.
00:59
So money can be used as same way we use goods in terms of marginal utility.
01:06
Although money will increase your total utility, it will increase a decreasing rate...