There is no scale we can use to determine the quantity of utility a peach generates.įrancis Edgeworth, one of the most important contributors to the theory of consumer behavior, imagined a device he called a hedonimeter (after hedonism, the pursuit of pleasure): But we cannot measure this utility the same way we can measure a peach’s weight or calorie content. A person who consumes a good such as peaches gains utility from eating the peaches. The concept of utility is an elusive one.
Economists call this satisfaction utility.
Why do you buy the goods and services you do? It must be because they provide you with satisfaction-you feel better off because you have purchased them. State, explain, and illustrate algebraically the utility-maximizing condition.State the law of diminishing marginal utility and illustrate it graphically.Distinguish between the concepts of total utility and marginal utility.Define what economists mean by utility.
