Tuesday, January 6, 2015

Utility is relative concept.

Meaning: -In ordinary sense, the term utility means ‘usefulness’. In economics, utility refers to the “Want satisfying power of a commodity”. For example: - Water has utility because it can satisfy the thirst of a person.

Relative concept: - Utility of a commodity changes from time to time and place to place. For example (1) Woollen clothes has more utility in Kashmir, than in Mumbai. (2) Umbrella has more utility in rainy season, than in summer.