UTILITY and USEFULNESS, Distinguish Between, Important for Exam.

Important for Exam

Distinguish Between: Utility and Usefulness

Topic: Chapter 2 - Utility Analysis (Economics)

In common language, 'Utility' and 'Usefulness' are often used synonymously. However, in Economics, there is a clear distinction between the two concepts. Below is the detailed comparison required for the board examination.

Points	Utility	Usefulness
1. Meaning	Utility is the want-satisfying power of a commodity. It is the capacity of a commodity to satisfy a human want.	Usefulness refers to the value-in-use of a commodity. It indicates the benefit or welfare derived from a commodity.
2. Nature	Utility is a morally colourless concept (Ethically neutral). It does not distinguish between good or bad, moral or immoral.	Usefulness implies a moral consideration. It is associated with the goodness or welfare of the consumer/society.
3. Benefit	A commodity having utility may or may not be useful to the consumer. It does not always guarantee welfare.	A commodity having usefulness is always beneficial to the consumer and promotes health or welfare.
4. Example	Liquor/Cigarettes: Liquor has utility for an addict because it satisfies their craving, but it does not have usefulness as it harms health.	Milk: Milk has both utility (satisfies thirst/hunger) and usefulness (provides nutrition/health benefits) to the consumer.
5. Relationship	Utility is the starting point of consumption psychology (felt before consumption).	Usefulness is the actual result or benefit realized (often judged after consumption).

Key Takeaway for Students

When writing this answer in the exam, ensure you emphasize that Utility is purely about satisfying a craving (whether good or bad), while Usefulness is strictly about benefit and welfare. The example of "Liquor vs. Milk" is the standard example expected by examiners.