Preview

Eco-Concept of Utility

Good Essays
Open Document
Open Document
286 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Eco-Concept of Utility
Utility means want satisfying power of a commodity. It refers to power or capacity of a commodity to satisfy human wants. In order to know whether a commodity possesses utility or not, we have to ask two questions:
a) Does commodity satisfy the want of people?
b) Are people ready to pay for it? If answers to these questions are affirmative then we can say that a commodity possesses utility, otherwise not. It is a measure of personal satisfaction or level of meeting a need that a good or service meets. For example, commodity like food, cloth, table, chair, etc. satisfies our wants. So, we can say that they have utility. Similarly services like services of a doctor, teacher, C.A., lawyer, musician, etc. also posses utility because they can satisfy our wants.
Let’s take one more example..!!
The initial cup of coffee in the morning meets a large need and provides a large amount of satisfaction (utility). Another example is going under water and holds your breath, keep holding it until you think you will pass out. Then come up out of the water, that first breath is wonderful tremendous utility. That is utility - the meeting of a need or being satisfied.
Marginal Utility:
Marginal utility means the utility available from an additional unit of a commodity. In other words, marginal utility means addition to total utility (or change in total utility) due to increase in consumption by one more unit.
Therefore, MUx=TUn-TUn-1
Total utility:
The aggregate level of satisfaction or fulfilment that a consumer receives through the consumption of a specific good or service. Total utility means summation of marginal utility of all the units of a commodity.
Therefore,

You May Also Find These Documents Helpful

  • Satisfactory Essays

    4. The term utility is someone’s pleasure, happiness, or satisfaction obtained from opportunities that the individual pursues. The term utility is related to purposeful behavior because consumers are purposeful in their decisions on what goods and services to buy. Therefore, buy being purposeful in their decision then they decide what opportunities to pursue to increase their utility.…

    • 651 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Demand and Supply Analysis

    • 1391 Words
    • 6 Pages

    4. Demand is that desire which backed by willingness and ability to buy a particular commodity.…

    • 1391 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    utility maximazation

    • 663 Words
    • 8 Pages

    utility function has its own M RS, which can easily be found using calculus. However, if we restrict ourselves…

    • 663 Words
    • 8 Pages
    Satisfactory Essays
  • Good Essays

    Outline Bentham, Mill

    • 745 Words
    • 3 Pages

    III. Utility = property in any object that produces benefits: if for the community then the community: if for a particular individual then for that individual.…

    • 745 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    3Jevons (1835-1882) was the first economist who introduced the concept of utility in economics. According to him ‘utility’ is the basis on which the demand of an individual for a commodity depends ‘Utility’ is defined as the power of a commodity or service to satisfy human want. Utility thus is the satisfaction which is derived by the consumer by consuming the goods. For example, cloth has a utility for us because we can wear it. Pen has a utility for a person who can write with it. The utility is subjective in .nature. It differs from person to person. The utility of a bottle of wine is zero for a person who is non-drinker while it has a very high utility for a drinker Here it may be noted that the term ‘utility’ may not be confused with pleasure or .Awfulness which a commodity gives to an individual. Utility is a subjective satisfaction which consumer gets from .consuming any good or service. For example,Poison is injurious to health but it gives subjective satisfaction to a person who wishes to die. We can say that utility is value neutral.3…

    • 343 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Something which has got the capacity to satisfy human need or want, we say that it has got utility.…

    • 8992 Words
    • 36 Pages
    Good Essays
  • Good Essays

    Product Decision

    • 3588 Words
    • 15 Pages

    A product can be defined as anything that can be offered to satisfy human needs.…

    • 3588 Words
    • 15 Pages
    Good Essays
  • Satisfactory Essays

    (i) Cardinal Measurement of Utility: It assumes that utility can be measured and the exact measurement can be given by assigning definite numbers such as 1, 2, 3, etc. It means that utility is a quantifiable entity. For example, a person can express the satisfaction derived from the consumption of a commodity in quantitative terms. He can say, for instance, that for him the first unit of the commodity has utility equal to 10, the second unit 8, and so on. Utility is usually measured in imaginary units.…

    • 333 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    Utility is defined as the satisfaction or pleasure which a consumer obtains from obtaining and consuming a good or service.…

    • 1243 Words
    • 5 Pages
    Satisfactory Essays
  • Better Essays

    I. Background. Utility is a measurement of consumer preferences made under a variety of assumptions with respect to the decision context being studied. The point of the utility measurement is to enable the study of behavior within the framework of the assumptions made in a fashion that takes advantage of mathematical tools. There are three decision frameworks:…

    • 3013 Words
    • 13 Pages
    Better Essays
  • Satisfactory Essays

    utility

    • 394 Words
    • 2 Pages

    A utility function converts a consumption bundle into a number that can be used for the purpose of ranking. A person receives a higher level of satisfaction (or utility) when consumption of…

    • 394 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    * Utility= the level of happiness or satisfaction that a person receives from the consumption of goods and services. Utility is a measure of well-being…

    • 1058 Words
    • 5 Pages
    Better Essays
  • Good Essays

    Total utility attained from a commodity refers to the sum total of satisfaction which a consumer receives by consuming the various units of the commodity. The more units he consumes, the greater will be his total satisfaction upto a certain point. As he keeps on increasing the consumption of the commodity, he eventually reaches a point of satisfaction that is of maximum satisfaction.…

    • 6143 Words
    • 25 Pages
    Good Essays
  • Satisfactory Essays

    Ordinal utility theory:-

    • 328 Words
    • 2 Pages

    Utility is usefulness, the ability of something to satisfy needs or wants.[1] Utility is an important concept in economics and game theory, because it represents satisfaction experienced by the consumer of a commodity or a "good". Not coincidently, a good is something that satisfies human wants and provides utility, for example, to a consumer making a purchase. It was recognized that one can not directly measure benefit, satisfaction or happiness from a good or service, so instead economists have devised ways of representing and measuring utility in terms of economic choices that can be counted. Economists have attempted to perfect highly abstract methods of comparing utilities by observing and calculating economic choices. In the simplest sense, economists consider utility to be revealed in people's willingness to pay different amounts for different goods.…

    • 328 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    In economics, a good is defined as something that satisfies a demand and therefore has economic value. Before the advent of the computer age, most goods were physical or tangible goods that could be held. A book, a piece of furniture, and a cheeseburger are all examples of tangible goods. By contrast, intangible goods have value but do not have a physical presence.…

    • 461 Words
    • 2 Pages
    Satisfactory Essays