Okuzeka
Economics vocabulary · Core Concepts

Utility

Meaning in economics, with examples

/juːˈtɪləti/nounCommon term

In economics, utility means: The satisfaction or benefit a person gets from consuming a good or service; economists assume people make choices to get as much of it as possible.

In Turkish: fayda

How it is used

A theory word, used in microeconomics with marginal utility (the extra satisfaction from one more unit) and utility maximisation. In everyday English, a utility is also a company that supplies electricity, gas or water, and utility bills are those bills.

Example sentences

  1. The marginal utility of a third slice of cake is lower than that of the first.

  2. Consumers are assumed to spend their income in a way that maximises utility.

Common collocations

  • marginal utility
  • utility maximisation
  • maximise utility
  • diminishing marginal utility
  • microeconomicsThe branch of economics that studies how individual households and firms make choices, and how prices are set in particular markets.
  • demandThe amount of a good or service that buyers are willing and able to purchase at each possible price during a given period.
  • diminishing returnsThe point at which adding more of one input, while the other inputs stay fixed, produces smaller and smaller increases in output.
  • opportunity costThe value of the best alternative you give up when you make a choice, for example the salary you lose by studying full time instead of working.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Core Concepts

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This page explains English vocabulary for learners. It is not financial advice.