Since the value of goods is derived from their ability to provide us with satisfaction, and since different satisfactions have unequal value to us, the value of different units of the same good will also be unequal, as it depends on the satisfactions they meet. The same good will have a different value to the same person depending on what need of his it meets at a given point in time.

Individuals use the first unit of a good to meet the most important and pressing needs related to it. They will use the second unit to meet the second most pressing need. As the quantity of the good they own increases, the needs that are met are less valuable and less pressing. In other words, identical goods will have different values for individuals, because the utility derived from them is not identical. The first units are the most valuable, and as the number of units consumed increases, each marginal unit is less valuable than the previous one.

Menger thus illustrated that the valuation we place on goods is not dependent on their total or overall utility and that their utility is not something inherent to these goods in the abstract, regardless of their quantities. Rather, the importance that we attach to goods is inextricably dependent on the quantity of those goods, and their quantity in relation to the existing supply of the good we have at our disposal. Humans make decisions based not on the total or abstract utility of an object but on the utility offered by distinct quantities of the good and their ability to satisfy our distinct needs.

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