Utility in Economics

1.2 Utility can be describe as the general satisfaction that arises from the consumption of goods. There are also different types of utility. Utility can be measured as a unit. The total utility is the sum of all the units of utility. The marginal utility is the change of unit of utility with every extra good consumed. (PARKIN et. al. , 2008).

The more of a good consumed, the lower the utility becomes. Once the marginal utility reaches zero, consumers will look for a substitute. In other words, their preferences will have changes.

1.7 Consumer choices are efficient along a demand curve because the demand curve is a description of the quantity demanded at each price when the utility is maximized. (PARKIN et. al. , 2008).

Utility explains a consumer’s marginal benefit for a specific good.

List of references:

· PARKIN, M, POWELL, M, MATTHEW, K, 2008. Economics (7e). Essex, England: Pearson.