What is Utility? Cardinal Utility, Total Utility & Marginal Utility Definition, Diagram, Table
Every day, we consume a range of items. By consuming the goods and services we derive satisfaction. The satisfaction derived from consumption of goods & services is called Utility in Economics. Is utility measured or ranked? The question has been answered by economist stating that utility can be measured with the help of cardinal and ordinal Approach. What is cardinal Approach of measuring Utility? The cardinal approach of measuring utility is the one wherein the utility is quantifiable. The utility is measured in utils. Let us understand this with the help of an example. Let us say, you derive 30 utils of satisfaction by consuming 1 plate of Momo and derive 20 utils of satisfaction by consuming 1 Pineapple Pizza. Then we can say that eating one plate of Momo gives more satisfaction or we can say Momo gives more of utility. Eating second plate of Momo gives you 40 utils of satisfaction, the utility derived increase, but as we eat more and more, beyond a point we don't...