Law of Marginal Utility Introduction The law of marginal utility reflects human behavior. It determines how people spend their time and money and how much value they assign to each item in their lives. The law states that the utility of an additional unit of a good or service decreases directly to the increase in …
IMPORTANCE OR BENEFITS OF THE LAW OF EQUI-MARGINAL UTILITY The Law of Equi-Marginal Utility has an important place in economics. The importance of concept cannot be ignored even though it is highly criticized. This applies in every field of economics, which is clear from the following
CRITICISMS, LIMITATIONS, OR EXCEPTIONS OF THE LAW OF EQUI-MARGINAL UTILITY Following are the main reasons for the criticism of the Law of Equi-marginal utility by H. H. Gossen. Although, it is a basic law of economics and consumers knowingly or unknowingly are compelled, to follow this law. This law is applicable in every field of …
Law of Equi-Marginal Utility: Criticism and Limitation Read More »
How is the Law of “Equi-marginal utility” helpful in maximizing the utility of a consumer? INTRODUCTION OF LAW OF EQUI-MARGINAL UTILITY We know that the wants of every man are unlimited. Wants arise again and again but man has limited means (income) to fulfill his wants and means have alternative uses. Thus, man always faces …
Measurement of Utility Utility is a Psychological and Personal Concept. There is a deference of opinion, whether measurement of utility can be done or not. Followings are the two approaches are prevalent in this regard.
Definition At a given time the overall utility derived from the consumption of all units of a commodity is called Total Utility.
Definition of Marginal Utility Marginal Utility is the utility which is derived from the consumption of an additional unit of a commodity. In other words, it is the addition to total utility, resulting from adding one unit to the consumption of a commodity. Example : Ram consumes 6 ice creams at a time. In this case, …
Marginal Utility : Definition and Classification Read More »
Meaning of Utility Utility means the power that satisfies any want. It is such an internal quality; which is found in all commodities desired by a person. The quality (power or capability) of a commodity which satisfies the human want; directly or indirectly is called Utility. Those commodities, which have wants satisfying power are called …
Utility – Concept and Characteristics of Utility Read More »
Difference Between Micro and Macro Economics Micro and Macro economics, both are absolutely vital and a person is only half educated it he understand the one, while being ignorant of the other.
Meaning of Macro Economics The word macro means big. Thus, in Macro Economics, either the whole economy is studied or those big units which are related to the economy as a whole. Definition In the words of Prof. Boulding Macro Economics deals not with individual quantities as such but aggregates of these quantities, not with individual …
Macro Economics – Importance, Limitations and Difficulties Read More »
