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When economists speak of the utility of a certain good, they are referring to
- a)the demand for the good.
- b)the usefulness of the good in consumption.
- c)the satisfaction gained from consuming the good.
- d)the rate at which consumers are willing to exchange one good for another.
Correct answer is option 'C'. Can you explain this answer?
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When economists speak of the utility of a certain good, they are refer...
Utility of a good refers to the satisfaction or usefulness that a consumer derives from consuming a particular good. It is the level of satisfaction or pleasure that an individual gains from consuming a product or service. The concept of utility is subjective and varies from person to person.
Factors affecting utility:
1. Personal preferences and tastes - The level of utility that an individual derives from a particular good is subjective and depends on their personal preferences and tastes.
2. Price of the good - The price of a good affects the level of utility that a consumer derives from it. As the price of a good increases, the level of utility that a consumer derives from it decreases.
3. Availability of substitutes - The availability of substitutes affects the level of utility that a consumer derives from a good. If there are close substitutes available in the market, the level of utility that a consumer derives from a particular good decreases.
4. Income level - The income level of a consumer affects the level of utility that they derive from a good. As the income level of a consumer increases, the level of utility that they derive from a particular good also increases.
Importance of utility in economics:
1. Understanding consumer behavior - The concept of utility is important in understanding consumer behavior. It helps economists understand how consumers make choices and allocate their resources.
2. Pricing of goods - The concept of utility is important in determining the price of goods. As the level of utility that consumers derive from a good increases, the price that they are willing to pay for it also increases.
3. Maximizing social welfare - By understanding the concept of utility, economists can work towards maximizing social welfare by ensuring that resources are allocated efficiently and that consumers derive maximum satisfaction from their consumption choices.
In conclusion, the concept of utility is an important one in economics as it helps economists understand consumer behavior, determine prices of goods, and work towards maximizing social welfare.
Factors affecting utility:
1. Personal preferences and tastes - The level of utility that an individual derives from a particular good is subjective and depends on their personal preferences and tastes.
2. Price of the good - The price of a good affects the level of utility that a consumer derives from it. As the price of a good increases, the level of utility that a consumer derives from it decreases.
3. Availability of substitutes - The availability of substitutes affects the level of utility that a consumer derives from a good. If there are close substitutes available in the market, the level of utility that a consumer derives from a particular good decreases.
4. Income level - The income level of a consumer affects the level of utility that they derive from a good. As the income level of a consumer increases, the level of utility that they derive from a particular good also increases.
Importance of utility in economics:
1. Understanding consumer behavior - The concept of utility is important in understanding consumer behavior. It helps economists understand how consumers make choices and allocate their resources.
2. Pricing of goods - The concept of utility is important in determining the price of goods. As the level of utility that consumers derive from a good increases, the price that they are willing to pay for it also increases.
3. Maximizing social welfare - By understanding the concept of utility, economists can work towards maximizing social welfare by ensuring that resources are allocated efficiently and that consumers derive maximum satisfaction from their consumption choices.
In conclusion, the concept of utility is an important one in economics as it helps economists understand consumer behavior, determine prices of goods, and work towards maximizing social welfare.
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When economists speak of the utility of a certain good, they are refer...
The correct answer is c because utility means wants satisfying power of a good.it refers to how much satisfaction we are gaining from the good that we purchase.
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When economists speak of the utility of a certain good, they are referring toa)the demand for the good.b)the usefulness of the good in consumption.c)the satisfaction gained from consuming the good.d)the rate at which consumers are willing to exchange one good for another.Correct answer is option 'C'. Can you explain this answer?
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