SATISFACTION OF PEOPLE BY CONSUMING ANY GOOD

For example,
If I am ready to pay Rs.2000 for cloth then I can say that I derives utility from that cloth.
So, "when people satisfaction derives from their consumption activities is called utility. "

There are two types of utility:
>Cardinal utility
>Ordinal utility

Cardinal utility is about rating it's quantitative in nature.

Ordinal utility is about ranking it can't be measured.

There is another important Term related to utility  and that is known as "diminishing marginal utility ".

Where in every additional unit I consume, the utility  decreases is known as diminishing marginal utility .