Utility FAQs:


Q: Is utility a measure of preferences over some set of goods?

A: Yes, it represents satisfaction experienced by the consumer from a good.

Q: Is utility empirically observable in the real world?

A: Yes.

Q: Is utility used to aggregate utilities across persons?

A: Yes, and to create a social welfare function.

Q: Are utilities used?

A: Yes, and differences in utils are treated as ethically or behaviorally meaningless: the utility index encodes a full behavioral ordering between members of a choice set, but tells nothing about the related strength of preferences.

Q: Is utility used?

A: Yes, and the magnitude of utility differences is treated as an ethically or behaviorally significant quantity.

Q: Is utility equivalent to maximizing the probability of success?

A: Yes.

Q: Was utility located at -40?

A: Yes, and then a cup of orange juice would be 160 utils more than zero, a cup of tea 120 utils more than zero.

Q: Is utility usually applied by economists in such constructs as the indifference curve?

A: Yes, and which plot the combination of commodities that an individual or a society would accept to maintain a given level of satisfaction.

Q: Is utility the quality in commodities that makes individuals want to buy them?

A: Yes, and the fact that individuals want to buy commodities shows that they have utility" Robinson also pointed out that because the theory assumes that preferences are fixed this means that utility is not a testable assumption".

Q: Is utility taken to be correlative to Desire or Want?

A: Yes.

Q: Is utility applied to generate an individual's price for an asset called the indifference price?

A: Yes.