Understanding Utility in Economics | Meaning, Types & Approaches

Описание: In this video, we explore one of the most fundamental concepts in economics — Utility — the want-satisfying power of goods and services.

Utility represents the satisfaction a person gets from consuming a product, not necessarily its usefulness or moral value. For example, someone may gain utility from cigarettes, even though they are harmful to health. This makes utility a subjective concept that varies from person to person.

In this video, you’ll learn:
✅ What is Utility in Economics?
✅ The Meaning and Characteristics of Utility
✅ Difference between Cardinal and Ordinal Utility approaches
✅ The Law of Diminishing Marginal Utility explained with examples
✅ Why Utility is the foundation of consumer behavior and demand analysis

⚙️ Key Concepts Covered:
Utility means satisfaction, not necessarily usefulness
Utility is subjective, relative, and diminishing
Cardinal Utility assumes satisfaction can be measured (in “utils”)
Ordinal Utility focuses on ranking preferences (more realistic)
Introduced by Prof. Alfred Marshall (Cardinal) and Prof. J. R. Hicks (Ordinal)
The Law of Diminishing Marginal Utility explains why satisfaction decreases with each additional unit consumed

Example: The first slice of pizza gives the highest satisfaction, but by the fifth slice, the pleasure fades — this is diminishing marginal utility in action!

Why It Matters:
Understanding utility helps explain consumer choices, market demand, and pricing behavior — key topics for B.Sc Agriculture, B.V.Sc & A.H, and Economics students preparing for university exams or PSC-level tests.

🌱 This lesson is part of our Economics for Agriculture and Veterinary Students series on Pedigogy.com — Nepal’s first research and resource-based platform for agri and vet sciences.

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