We begin with a simple example, a detailed look at the utility someone might derive from pizza. Imagine that the world is just like it is now with one important exception, no matter how much money you have, you are only able to purchase one pizza each semester. In such a world, pizza would be a very special treat. How much would someone be willing to pay for her one and only pizza for a full semester?

    Consider a consumer whose willingness to pay (the maximum amount she would pay) for one pizza, if she can only purchase one pizza each semester, is $35. We've graphed her willingness to pay to the right. $35 may seem like a lot to those of us living in a world where pizza is plentiful, but it's probably quite reasonable in the world we've imagined where pizza is, at most, a twice-a-year treat!

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