UW Möbius - 6.1 Consumption Choices

Tags

Top Highlights

• Utility is an ordinal value

• Utility is defined as the benefit or satisfaction that an individual gets from the consumption of a good or service.

• The choice that Lisa makes depends on her preferences—her likes and dislikes.

• Utility varies from consumer to consumer and influences consumers’ purchasing choices.

• we assign a value to utility by ranking goods and services in accordance to their level of satisfaction

• which is how utility is measured.

• The actual units that we use to measure utility really does not matter.