We've added a Marginal Utility (the addition to total utility for each added novel) column to the table to the right. (Hint: It's certainly not necessary, but if you find you're having trouble with this kind of question on a test it is often very helpful to quickly compute and jot down such a column. The same is true for marginal costs, or any other marginal value not given in the original table.)

   Joe's marginal utility for the first book is $25 while for the second book it is $20, so diminishing marginal utility sets in with the second novel.