Utility, its Measures and Characteristics

Utility Meaning - The clear meaning of ‘utility’ is ‘usefulness’ i.e what is value to you or the satisfaction people derived from any activity. Example likes Hobbies, past times, profession etc. In economics utility is the capacity of a commodity to satisfy human wants.

Measurement of Utility - 
Utility can be measured as :

1) Cardinal Utility : Cardinal Utility is the type of Utility which measures the capacity in numbers i.e it quantifies the things in length , breadth , height etc.

2) Ordinal Utility : Ordinal Utility is the type of utility which decides the rank or we can say  assignment of rank is done in ordinal utility. Ranking is done independently.

Utility Characteristics -

# Principle of diminishing marginal utility - The more of a goods that one obtain in a specific period of time, the less the additional unit of the goods.

# Utility diminishes over time - The shorter the time period, the more quickly marginal utility diminishes.

# Consumers are not identical - The rate at which marginal utility diminishes depends on individual tastes and preferences and so differs across consumers.