Submitted by thetwitchy1 t3_zwm1p1 in singularity
natepriv22 t1_j1wmjv5 wrote
Reply to comment by thetwitchy1 in AI art is the ‘machine made fabric’ of tomorrow. by thetwitchy1
That's all goods though...
Marginal utility plays a large role here
thetwitchy1 OP t1_j1wwo8j wrote
Bread, rice, houses, shoes… none of these are really “something you can live without”.
Croissants, wild risotto, mansions, air Jordan’s… these are all items you really never NEED.
Imho, that’s the difference.
natepriv22 t1_j1yaql8 wrote
And yet the ones you listed below are worth more than the ones you listed above
That's due to marginal utility theory: "People make decisions on the margin. No one chooses between "guns" or "butter", but between a definite amount of guns and a definite amount of butter.
As an actor acquires more and more units of a good, he devotes them to successively less and less urgent ends (i.e. ends that are lower on his scale of values). Therefore the marginal utility of a good declines as its supply increases. This is the law of diminishing marginal utility."
eve_of_distraction t1_j1y8mt2 wrote
According to Collins Dictionary:
"Luxury goods are things which are not necessary, but which give you pleasure or make your life more comfortable."
Let's not overthink it.
natepriv22 t1_j1yaecj wrote
That's a linguistic not economic definition.
"In economics, utility is the satisfaction or benefit derived by consuming a product. The marginal utility of a good or service describes how much pleasure or satisfaction is gained by consumers as a result of the increase or decrease in consumption by one unit."
The definition you provided still doesn't give a proper method of classification of what a luxury good is.
Here is what you're probably looking for:
"In economics, a luxury good (or upmarket good) is a good for which demand increases more than what is proportional as income rises, so that expenditures on the good become a greater proportion of overall spending."
TLDR: in other words, in a desert full of diamonds, water is a luxury good, while in a city full of water, diamonds are a luxury good.
eve_of_distraction t1_j1yk50o wrote
>water is a luxury good
Nonsense. Water is one of the basic necessities of survival regardless of the environment. Get out of here with your esoteric relativistic obscurantistism. 🤦
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