utility
yoo-TIL-uh-tee
/juːˈtɪl.ə.ti/
The total satisfaction, value, or benefit derived from consuming a good or service.
In economics, utility is a subjective measurement of perceived value rather than objective physical usefulness.
The story behind the word. From Latin 'utilis' (useful), the term became the cornerstone of Bentham and Mill's Utilitarianism in the 18th century, defining the ethical good as 'the greatest happiness for the greatest number.' 19th-century economists converted this philosophical concept into a formal mathematical tool to calculate consumer choice.
Word relationships
- satisfaction: Satisfaction is an everyday feeling of contentment; utility is a quantifiable metric of value in economics.
- usefulness: Usefulness refers to practical function, whereas utility measures subjective human preferences.
- disutility: Disutility represents pain, dissatisfaction, or economic cost experienced from an outcome.
Commonly confused with
- usefulness: A stamp collection has low practical usefulness but high subjective utility for a stamp collector.
Word family
- utilize (verb): To make practical and effective use of something.
- utilitarian (adjective): Designed to be useful or practical rather than attractive.
Collocations
- expected utility
- marginal utility
- utility maximization
- perceived utility
Idioms & expressions
- bang for your buck
Example sentences
- "Standard models assume that consumers always act to maximize their total expected utility." Classical economics textbook
- "Prospect theory showed that experienced utility differs sharply from anticipated decision utility." Behavioral economics critique
Memory hook
UTILITY measure how UTIL-itarian (useful and satisfying) an outcome is to you. Utility = Your satisfaction score for a choice.
When not to use
Do not confuse overall economic satisfaction with public utility infrastructure like gas or water providers unless context specifies.
Fun facts
- Economists used to invent imaginary units called 'utils' to measure happiness in early mathematical models!
Related words
Explore more words
marginalism, utilitarianism, utilitarian, payoff, usability, economist
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