Bowed Indifference

Actually, it's not so simple though: Remember the diminishing rate of marginal substitution:

As the supply of a staple goes down, the utility of a luxury decreases: starvation worries

As the supply of a staple goes up, people more willing to give some of them up to consume some luxury goods.

Let's assume my son loves peanut butter (he did when I wrote this the first time).  If he's got a lot of peanut butter sandwiches, he'd be willing to give some up for cheese, which he likes, but not nearly as much as peanut butter.  But, if I start limiting his peanut butter, he holds on to those sandwiches tighter and tighter.  So, for example, if he had ten, he'd probably be glad to give up three or four for some cheese.  But, if he had only two, I'd have to offer him an awfully lot of cheese to make him part with one of them, if I could at all.

budget