Utility Analysis (Autosaved)

7/31/2019 Utility Analysis (Autosaved)

1/4

I

Th

Economi

Meaning

It also m

Features

1. Utility

gives

child

2. Utility

same

more

3. Utilitywhet

peopl

4. Utility

deriv

utility

5. Utility

provi

cons

6. Utility

E.g.7. Utility

satisf

8. Utility

numb

a car

Types of

1. Fo

cowo

2. Ti

co

se

3. Pl

co

Ka

RA COM

e concept i

s.

and Defin

ans the w

/ Charact

is Subjecti

different u

nd no utili

is relative

commodit

utility in K

has no eter moral o

e is immor

depends

d will be

from the w

is differen

es pleasu

mption of

is multipur

oal, electriis not sam

ction is d

can not b

ers. It can

inal meas

Utility

rm Utility:

mmodity itod.

e Utility:

mmodity it

ason.

ce Utility:

mmodity it

shmir than

ERCE T

s populari

ition: Utili

ant satisfyi

ristics of

ve term: U

ility to diffe

ty to an ad

term: it me

gives diff

shmir as c

ical signifir immoral h

l.

n intensity

are and vi

ater.

from plea

e also som

hat comm

pose: A si

city, watere as satisf

rived after

measure:

only be co

rement of

hen utility

is called as

hen utility

is known a

hen utilit

is known a

in Mumbai

TORIALS

Utilit

ed by Dr.

y is the ca

ng power o

Utility:

ility differs

rent perso

lt.

ans it is de

rent utility

ompare to

ance: Anyas Utility.

of wants: I

e versa. E

ure : It is

e commod

dity. E.g.

gle comm

tc.ction: a p

the consu

utility is th

pare. But

utility.

is created

form utilit

is created

Time Utili

is created

Place Util

.

Analy

lfred Mars

acity of th

f a commo

from perso

s. E.g. pla

pended an

at different

Mumbai.

commodit.g. AK47

f the want i

.g. if a per

ot necess

ity only pro

itter medi

dity may h

rson deriv

ption.

psycholo

prof. Alfre

by changin

. E.g. maki

by changi

ty. E.g. um

by changi

lity. E.g. W

is

hall in 198

e commodi

dity. E.g.

n to perso

ying with a

d related o

place and

which satas utility t

s more urg

on is mor

ry that co

vide utility

ine.

ave power

s utility du

ical conce

Marshall

g the form

ing dress f

g the time

brella has

ng the plac

oolen cloth

..........

0 in his bo

ity to satisf

. water has

. The sam

doll gives

n time and

time. E.g.

isfy any hushoot pe

ent and int

thirsty he

modity ha

but no ple

to satisfy

ring the co

pt and can

as unreali

(shape, si

om cloths,

of consum

more utility

e of consu

es has mo

..........Econ

k principl

human w

utility---thi

e commod

more utility

place. The

woolen clo

man wantsple but killi

ensive the

will derive

ving utility

sure in

everal wa

nsumption

t be meas

stically ass

e) of a

chair from

ption of a

during rai

mption of a

re utility in

mics

s of

ants.

st

ity

to a

th has

ing

utility

more

ts.

but

re in

umed

y


2/4

I

4. Se

se

Te

5. Po

co

to

Total Util

Total Util

of a com

Marginal

unit of a

Relation

Stage on

Stage twincreasin

Stage th

level in th

satiety.

Stage fo

start fallin

1. Mdepogi

2. Fo3. N

rat4. Aft

aft

UNITS

1

2

3

4

5

6

RA COM

rvice Utilit

rvice it is c

acher etc.

ssession U

mmodity it

whole sell

ity And M

ity: It is th

odity duri

Utility: It i

ommodity.

hip betw

e [TU=MU

o [TU anat diminis

ee [TU-co

is stage w

ur [TU M

g and MU

Toaning: It is

rived fromssible uniten periodrmula: TUture: TU ine.er Satietyer this poin

TU

15

27

35

38

38

36

ERCE T

: When th

lled as Se

tility: Whe

is known a

r to retaile

rginal Uti

sum total

g a given

the additi

Formula

en TU an

]: When th

MU]: Ashing rate a

nstant, M

ere MU is

=-ve] : if t

becomes

tal Utilitythe sum t

consumptis of a comf time.U1+U2+creases at

oint: TU st

MU

15

12

8

3

0

-2

TORIALS

utility is d

rvice Utility

utility is c

Possessi

to consu

lity

of all Utilit

period of ti

nal utility

U = TUn

MU:

T

consume

the consund MU sta

=0]: The

zero and n

he consu

egative.

tal of all Un of allmodity duri

+Una diminishi

art decrea

rived from

. E.g. Servi

eated by c

on Utility.

er.

derived fr

e. Formul

erived fro

TUn-1

U

U

r consume

er go ont falling.

onsumer r

o increase

er consum

ility

ing a

ng

ing

It isconcoMUAsdecMU

the perso

ice provide

hanging th

.g. Goods

om consu

laTU = U

the cons

Units Co

d first unit

onsuming

eaches a t

in TU. Thi

e beyond t

the additisumptionmodity

=TUn-TUn-the consureasing.becomes

..........

who is pr

d by Docto

e ownershi

transfer fr

ption of all

1 + U2 + U

umption of

nsumed

U and MU

more units

e maximu

point is c

he point of

arginal Utnal utility df an additi

1er consu

negative af

..........Econ

viding an

r, lawyer,

p of a

m manufa

l possible

3 + ..........

an additio

both are

total Utilit

satisfacti

lled as poi

satiety TU

ilityerived fronal unit of

e more M

ter this poi

mics

turer

nites

.+Un

al

qual.

start

ion

nt of

will

thea

start

nt.


3/4

I

Introduc

based on

have mor

1. Stpe

in

2. As

1.

2.

3.

4.

5.

6.

3. Ill

As

curve is d

consumin

beyond t

4. Ex

1.

2.

3.

4.

5.

RA COM

L

ion: This

the day to

e of it.

tement orson deriv

rease in th

sumption

Cardinalit

Homogen

with resp

Rationalit

is to maxi

Continuit

after the o

Reasona

reasonabl

No chang

stration:

shown in t

ownward s

g more an

at point M

ception to

Money:Tof money

Miser:he

interested

Hobbies: I

unit will gi

Addiction:

Reading:

ERCE T

aw Of Di

aw is give

day experi

Law: Oths from a gi

e stock tha

to the la

: It is assu

eity:All the

ct to size,

: The cons

ize his sa

:the consu

ther and th

ility:The u

e that mea

in taste a

he diagra

lopping fro

more unit

U become

the law:

e law of Dgives more

is more int

more in co

n case of

e more an

in case of

s the sch

TORIALS

minishin

by Famo

ence. The

r things bven increa

t he alread

:

med that U

units of th

hape, col

umer must

tisfaction.

mer must

ere should

nits of the

ns not too l

nd prefere

units are

m left to ri

s MU decli

negative.

his law ha

MU is notsatisfactio

rested mo

llection of

obbies lik

d more util

drunker ev

lar go on r

g Margin

s Econom

more you

ing equal,e in the st

y has.

tility can b

given co

r, quality e

be a ratio

onsume al

not be ga

ommodity

arge or too

ce of the

epresente

ht indicati

nes. And a

following

pplicable tn.

re in collec

ealth.

collection

ity.

ery additio

eading bo

al Utility

ist Dr. Alfr

ave of a th

The additiock of a thi

measure

modity sh

tc.

al consu

ll the given

in betwee

to be cons

small.

onsumer.

d on X axis

g that as t

t one point

exceptions

o money b

tion than i

of stamps

peg of liq

ks he will

..........

[DMU]:

d Marshall

ing the les

ional benefng diminis

in number

ould be pe

er whose

units of th

n the cons

umed sho

and MU is

he consum

he derive

.

ecause ev

consumpt

or coins ev

uor will ad

erive mor

..........Econ

. This law i

s you want

it which aes with ev

.

rfectly iden

rimary obj

commodi

umption.

ld be

on Y axis.

er go on

ero utility

ry addition

ion. He is

ery additio

more utili

utility.

mics

s

to

ery

tical

ective

ty one

MU

nd

units

nal

y.


4/4

I

1. Int

T

of

sh

sa

2. St

O

sp

un

i.e

3. As

1.

2.

3.4.

5.

6.

4. Ill

Le

thr

Th

Th

fru

RA COM

roduction

is Law is

substitutio

ould maxi

me time.

tement:

ther things

end his inc

it of money

. MUx/Px=

sumption

It is assu

MU of mo

Price of thAll the uni

The cons

maximize

Income of

stration:

t us assum

ee commo

e prices of

e consum

it to get eq

ERCE T

Law

:

iven by Fa

. It is the e

ize his sati

being equ

ome on diff

spent in e

Uy/Py = M

:

ed that Uti

ney is cons

e commodts are iden

mer must

his satisfa

the consu

e that the

dities Swe

the comm

r should c

ual satisfa

TORIALS

f EQUI-

mous Eco

xtended fo

isfaction w

l, a ration

erent good

ach directi

Uz/Pz

ility can be

tant it is s

ity remainsical in sha

be a ration

tion.

er is fixed

onsumer h

ts, Vegeta

dities are

oose 5 uni

tion from a

ARGIN

omist Dr.

rm of law o

ile consu

l consume

s and serv

n of expe

measure i

me for all

unchangee, size, co

l consum

and is sp

as a fixed

ble and Fr

.4, 6 and

ts of swee

ll three co

L UTILI

lfred Mar

f DMU. It

ing more

r with give

ices in suc

diture brin

numbers.

eople rich

d.lor, taste e

r whose p

nt on the

given inco

its.

0 respecti

!

s, 3 units

modities.

..........

Y

hall. It is al

xplains ho

han one c

income a

h a manne

gs in equal

as well as

tc.

imary obje

iven com

e which h

vely.

f Vegetabl

..........Econ

so known

a consu

mmodity

nd taste sh

that the la

marginal u

poor

ctive is to

odities.

e is spendi

e and 1 uni

mics

s law

er

t the

ould

st

tility.

ng on

it of

Documents

Utility Analysis (Autosaved)