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Pink Icing and Diminishing Marginal Benefit

I’ve been baking for forever. My sister and I used to make brownies for our swim team coaches in elementary school, and by high school I was often making cakes and cookies for my friends’ birthdays. I stuck with the basics – cookies and cakes. One of my favorite cookies to make (and eat) were Amish cookies. Basically, it is a soft sugar cookie with a sweet icing on top. We traditionally colored the icing pink, but I’ve also done red and green for Christmas or a collection of pastels for Easter.

A couple guys in my class always raved about the icing. This one guy, Nick, said I should just bring in the icing – forget the cookies. After a couple years of asking for just the icing, I begrudgingly relented and brought in a plastic container with a batch of icing in it – enough icing to go on three dozen cookies. Here is what followed:

Nick and his side-kick for the adventure, Adam, said they were going to eat the whole container of icing in one sitting. We all huddled around (it was high school… we thought they were cool) .

They took a couple spoonfuls and thought it was good.

They took a few more spoonfuls and still enjoyed it.

Soon, they started to slow down.

Each spoonful of sugar and butter was tasting less and less good.

By the time they got to the end (their pride wasn’t going to let them stop early), they were pretty grossed out… as was I.

What does this have to do with economics? So much! It’s called diminishing marginal benefit (or utility). Each additional consumption of a good might provide benefit, but it provides less and less each time. It’s one of the reasons a demand curve is downward sloping. To buy the first unit of something (let’s say a spoonful of icing), you might spend $1. For the second one, 80 cents. For the third, 50 cents. And, so on. At lower prices of goods, you’ll be willing to buy more. At higher prices you’ll be willing to buy less.

This lesson might seem obvious, intuitive even. It is! But it is a crucial part of understanding economics, and we are going to come back to it in the future.

I don’t think they ever ate an Amish cookie again. But, I recommend you do.

Color them in pastels for Easter or a baby shower! Strangely, people think the pink ones taste better...

Amish Cookies:

Combine and beat well:

1 cup oil

1 cup margarine or butter, melted or softened

1 cup sugar

1 cup powdered sugar

Add and beat well again:

2 eggs

1 tsp. vanilla

Add and mix well again:

4 ½ cup flour

1 tsp. baking soda

1 tsp. cream of tartar

Chill dough at least 2 hours in the fridge. Preheat oven to 375 degrees. Make small balls of dough. Flatten with a fork. Bake the cookies 8-10 minutes. Let cookies cool.


6 cups powdered sugar

2/3 cup margarine or butter

3 tsp. vanilla

4 Tablespoons milk

Mix the above ingredients. Add food coloring to make whatever color you want! Spoon onto cooled cookies.

This recipe is from my mom’s friend Patsy!


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