The definition of utility in economics
- May 18, 2023
- Brian Jenkins, economics, MoneyGeek, May 18, 2023
Brian Jenkins, UCI associate teaching professor and director of undergraduate studies in economics, writes, “What is the best way to understand the role of utility in economics?
Utility is an abstract idea that says something about how a person values having a good or a combination of goods. Economists often assume that people make decisions in order to maximize their utility. It’s another way to say that people make choices to best achieve their objectives. The objectives might be different. Some people are driven to pursue happiness, pleasure, philanthropic outcomes or a combination of these.
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