Utility Analysis - Lecture 1

Introduction

• Presenter: Jay Rajguru
• Class: 12th
• Subject: Economics
• Chapter: Chapter 2 - Utility Analysis
• This Video: First Lecture

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Introduction to Utility Analysis

• Utility: Want satisfying power of a commodity
• Definition: The capacity of a product to fulfill our desires

Features of Utility (10 Points)

Shortcut for Features: Mrs. Bhide

1. M - Multipurpose Utility
   • A commodity can have various uses (e.g., electricity)
2. R - Relative Concept
   • Depends on time and place
   • (e.g., woolen clothes are more useful in winter)
3. S - Subjective Concept
   • Differs from person to person
   • (e.g., a stethoscope is useful for a doctor)
4. B - Basis of Demand
   • Forms the basis of demand
   • (e.g., a sick person demands medicine)
5. H - Hypothetical
   • An abstract idea
   • Can be experienced but not measured
6. I - Intensity of Want
   • Higher intensity, higher utility (e.g., water for a thirsty person)
7. D - Differs from Usefulness
   • Utility and usefulness are different
   • (e.g., milk and liquor)
8. D - Differs from Pleasure
   • Utility and pleasure are different
   • (e.g., taking an injection - it has utility but no pleasure)
9. D - Differs from Satisfaction
   • Utility is the start, satisfaction is the result of consumption
   • (e.g., quenching thirst after drinking water)
10. E - Ethically Neutral
    • No distinction between right and wrong
    • (e.g., a knife can be used for cutting vegetables or causing harm)

Conclusion

• 10 features - Mrs. Bhide
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• Contact on Instagram for any doubts: @rajguru_jay_shri