Question: How to Buy Happiness. Cheap
On any day, the rich tend to be a bit happier than the poor, but increases in average living standards don't seem to make people happier. The average American's income is up 80% since 1972, but the percentage describing themselves as "very happy" (roughly a third) hasn't changed. As living standards increase, most of us respond by raising our own standards: Things that once seemed luxuries now are necessities and we work harder to buy stuff that satisfies us less and less.
According to the news clip:
a. How do widespread increases in living standards influence total utility?
b. How do total utility and marginal utility from consumption change over time?