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Utility of a good can be explained as a?
- a)Monetary value a consumer gains from consuming a particular good
- b)Difference between what a consumer is willing to pay and actually pays
- c)Desire to consume
- d)Satisfaction that a consumer derives from the consumption of a particular good.
Correct answer is option 'D'. Can you explain this answer?
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Utility of a good can be explained as a?a)Monetary value a consumer ga...
Utility itself means "want satisfying power of a c
ommodity". So, in other
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Utility of a good can be explained as a?a)Monetary value a consumer ga...
Understanding Utility
Utility is a central concept in economics that refers to the satisfaction or pleasure derived from the consumption of goods and services. The correct answer, option 'D', illustrates this concept effectively.
What is Utility?
- Utility represents the **satisfaction** a consumer experiences when they consume a good.
- It is a subjective measure and can vary from person to person based on preferences and experiences.
Why Option D is Correct?
- **Focus on Satisfaction**: Option 'D' emphasizes satisfaction, which is the essence of utility. Consumers make choices based on the expected satisfaction they will gain from goods.
- **Consumption Experience**: The utility derived is not just about the physical attributes of the good but also about the emotional and psychological satisfaction it provides.
Comparison with Other Options
- **Option A (Monetary Value)**: This reflects the price rather than the subjective satisfaction. Utility is not always measurable in monetary terms.
- **Option B (Difference in Willingness to Pay)**: This refers to consumer surplus, a related concept but not the definition of utility itself.
- **Option C (Desire to Consume)**: Desire is a precursor to consumption but does not measure the satisfaction actually obtained from the good.
Conclusion
Understanding utility as the satisfaction derived from consumption helps in grasping consumer behavior and decision-making processes in economics. By focusing on the satisfaction (option 'D'), we gain insight into why consumers choose certain goods over others.
Utility is a central concept in economics that refers to the satisfaction or pleasure derived from the consumption of goods and services. The correct answer, option 'D', illustrates this concept effectively.
What is Utility?
- Utility represents the **satisfaction** a consumer experiences when they consume a good.
- It is a subjective measure and can vary from person to person based on preferences and experiences.
Why Option D is Correct?
- **Focus on Satisfaction**: Option 'D' emphasizes satisfaction, which is the essence of utility. Consumers make choices based on the expected satisfaction they will gain from goods.
- **Consumption Experience**: The utility derived is not just about the physical attributes of the good but also about the emotional and psychological satisfaction it provides.
Comparison with Other Options
- **Option A (Monetary Value)**: This reflects the price rather than the subjective satisfaction. Utility is not always measurable in monetary terms.
- **Option B (Difference in Willingness to Pay)**: This refers to consumer surplus, a related concept but not the definition of utility itself.
- **Option C (Desire to Consume)**: Desire is a precursor to consumption but does not measure the satisfaction actually obtained from the good.
Conclusion
Understanding utility as the satisfaction derived from consumption helps in grasping consumer behavior and decision-making processes in economics. By focusing on the satisfaction (option 'D'), we gain insight into why consumers choose certain goods over others.
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Utility of a good can be explained as a?a)Monetary value a consumer gains from consuming a particular goodb)Difference between what a consumer is willing to pay and actually paysc)Desire to consumed)Satisfaction that a consumer derives from the consumption of a particular good.Correct answer is option 'D'. Can you explain this answer?
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