Utility Analysis Flashcards Preview

Economics > Utility Analysis > Flashcards

Flashcards in Utility Analysis Deck (6)
Loading flashcards...
1
Q

What is utility

A

Want satisfying power of a commodity

2
Q

Features of utility

A

1) Relative concept ( t&p)
2) Subjective concept ( differs , physiological)
3) Ethically neutral concept ( morally colourless)
4) differs from usefulness
5) pleasure
6) satisfaction ( cause and end result)
7) Measurement hypothetical ( abstract concept)
8) multi purpose
9) depends on intensity of want
10) basis of demand

3
Q

Types of utility
( place service on time to form knowledge possession)

A

1) place ( transport)
2) service ( personal by prof )
3) time ( time of utilisation, stored & used at the time of scarcity)
4) form ( shape, structure)
5) knowledge ( acquire);
6) possession ( ownership transferred)

4
Q

Total utility

A

Aggregate of utility derived - all units
Aggregate of utility - successive units cons

5
Q

Marginal utility

A

Additional - derived - additional unit consu
Add made - last unit - cons

6
Q

Relationship bet total and marginal

A

Mar and total inter related
Hypothetical ex
X axis - units
Y axis - figures of total and marginal
Total- slopes upwards
Marginal - downward
Total - Max and constant
Marginal - 0 and neg
1) same
2) total inc diminishing rate and mar goes on diminishing
3) particular stage - t max and constant, mar 0 - point of satiety
4) further results in decline of t and neg of mar
5) after reaching - rational stop - max limit of satisfaction obtained
6) beyond - sat to dis , experience I’ll effects of consumption