utility
Definition
Utility refers to the satisfaction or benefit derived from consuming a good or service. It is a measure of the usefulness or pleasure provided by a product or action1.
Economic Perspective
- In economics, utility is used to understand consumer behavior and choices based on preferences and satisfaction levels1.
Types of Utility
- Marginal Utility: The additional satisfaction gained from consuming one more unit of a good or service2.
- Total Utility: The overall satisfaction obtained from all units of a good or service consumed2.
Measurement
- Cardinal Utility: Quantifiable and measurable utility.
- Ordinal Utility: Utility that can be ranked but not measured2.
Utility Function
- Represents preferences with numbers assigned to alternatives, where higher numbers indicate greater preference2.
Key Concepts
- Law of Diminishing Marginal Utility: As more units are consumed, the additional satisfaction from each new unit tends to decrease2.
- Indifference Curve: A graph showing different bundles of goods between which a consumer is indifferent2.
Criticisms
This entry provides a concise overview of the concept of utility, suitable for quick reference or note-taking in Obsidian. For a more comprehensive understanding, you may refer to the detailed Utility - Wikipedia page.