Utility is a term which basically means satisfaction, and is generally used in the context of some want as perceived by a person. I am hungry, I therefore want food, a burger provides me some utility or satisfaction of that want. Giving me a lecture on history when all I want is food does not give me utility. In fact it may annoy me if you start lecturing me on history. Under those circumstances, the lecture on history has disutility, a source of dissatisfaction to me. Utility is measured in utils means satisfaction. When we buy anything we compare utility of that commodity with money spent. Because we have limited money and many wants, so we compare utilities of other substitutes and goods we are not buying to get that particular good.
No comments:
Post a Comment