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Learn the various meanings and uses of the word utility as a noun and an adjective. Find synonyms, examples, word history, and related phrases of utility.
Utility definition: the state or quality of being useful; usefulness. See examples of UTILITY used in a sentence.
Learn the meaning of utility as a noun, adjective, and service in English. Find out how to use utility in different contexts, such as public services, sports, IT, and economics.
Learn how economists measure the usefulness or value of something using utility units. See how total utility and marginal utility change as you consume more or less of a good, such as ice cream.
- 6 min
- What Is Utility?
- Understanding Utility
- Ordinal Utility
- Cardinal Utility
- Total Utility
- Marginal Utility
- The Bottom Line
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In economics, utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisfaction or benefit derived from consuming a good or service. Economic theories based on rational choice usually assume that consumers will strive to maximize their utility. The economic utility of a good or service...
The utility definition in economics is derived from the concept of usefulness. An economic good yields utility to the extent to which it's useful for satisfying a consumer’s want or need.Various schools of thought differ as to how to model economic utility and measure the usefulness of a good or service. Utility in economics was first coined by the...
Early economists of the Spanish Scholastic tradition of the 1300s and 1400s described the economic value of goods as deriving directly from this property of usefulness and based their theories on prices and monetary exchanges. This conception of utility was not quantified, but a qualitative property of an economic good. Later economists, particular...
To Bernoulli and other economists, utility is modeled as a quantifiable or cardinal property of the economic goods that a person consumes. To help with this quantitative measurement of satisfaction, economists assume a unit known as a “util” to represent the amount of psychological satisfaction a specific good or service generates for a subset of p...
If utility in economics is cardinal and measurable, the total utility (TU) is defined as the sum of the satisfaction that a person can receive from the consumption of all units of a specific product or service.Using the example above, if a person can only consume three slices of pizza and the first slice of pizza consumed yields ten utils, the seco...
Marginal utility(MU) is defined as the additional (cardinal) utility gained from the consumption of one additional unit of a good or service or the additional (ordinal) use that a person has for an additional unit. Using the same example, if the economic utility of the first slice of pizza is ten utils and the utility of the second slice is eight u...
Utility can be used to measure the usefulness of goods and services to consumers. While there are limitations when more variables and differences appear in the market, various types of economic utility continue to be examined. Not only can it help companies with structuring their tiered pricing but it can also help consumers learn how to boost the ...
Utility is the satisfaction or benefit derived from consuming a good or service. Learn about the different types of utility (ordinal, cardinal, total, marginal) and how to measure them in economics.
5 days ago · Learn the meaning and usage of the word utility in different contexts, such as usefulness, public service, economics, and computing. Find synonyms, pronunciation, and related words for utility in British and American English.
Learn the various meanings and uses of the word utility in different contexts, such as computers, sports, and public services. Find examples, synonyms, and related terms for utility in Britannica Dictionary.
