Difference between revisions of "Utility"
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Utility functions are mathematical ways of representing the benefits accruing to a consumer from his consumption of various goods. A utility function, in conjunction with a budget constraint, may be used to determine a consumer's optimal bundle of goods. | Utility functions are mathematical ways of representing the benefits accruing to a consumer from his consumption of various goods. A utility function, in conjunction with a budget constraint, may be used to determine a consumer's optimal bundle of goods. | ||
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| + | The term utility has its origins in the philosophical movement of [[utilitarianism]]. | ||
[[Category:Economics]] | [[Category:Economics]] | ||
[[Category:Philosophy]] | [[Category:Philosophy]] | ||
Revision as of 04:22, April 2, 2007
Utility is an economic term representing the someone's satisfaction or happiness. The utility of a good, for example, is its ability to bring satisfaction to the buyer.
Utility functions are mathematical ways of representing the benefits accruing to a consumer from his consumption of various goods. A utility function, in conjunction with a budget constraint, may be used to determine a consumer's optimal bundle of goods.
The term utility has its origins in the philosophical movement of utilitarianism.