Question

What are the important features of utility?

Answer 1

The important features of utility:

1. Utility is psychological. It depends on the consumer’s mental attitude. For example, a vegetarian derives no utility from mutton.
2. Utility is not equivalent to usefulness. For example, a smoker derives utility from a cigarette; but, his health gets affected.
3. Utility is not the same a pleasure. A sick person derives utility from taking a medicine, but definitely it is not providing pleasure.
4. Utility is personal and relative. An individual obtains varied utility from one and the same good in different situations and places.
5. Utility is the function of the intensity of human want. An individual consumer faces a tendency of diminishing utility.
6. Utility cannot be measured objectively. It is a subjective concept and it cannot be measured numerically.
7. Utility has no ethical or moral significance. For example, a cook derives utility from a knife using which he cuts some vegetables, and a killer wants to stab his enemy by that knife. In Economics, a commodity has utility if it satisfies a human want.