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utility

yoo-TIL-i-tee /juːˈtɪləti/

nounB2GREGMATSAT

formalacademic

The total satisfaction, usefulness, or value derived by a consumer from consuming a good or service.

In economics, utility is subjective and individual; it measures personal preference fulfillment rather than objective functional usefulness.

The story behind the word. From the Latin 'utilis' meaning 'useful'. Jeremy Bentham and John Stuart Mill popularized utilitarianism in philosophy, which neoclassical economists like Alfred Marshall adopted as a quantifiable metric for subjective satisfaction in market decisions.

Word relationships

satisfaction: A subjective feeling of happiness, whereas utility is an abstract economic measure of value realized.
usefulness: Refers to practical function, while economic utility can include luxury or entertainment value.

disutility: A state of dissatisfaction or harm caused by consuming or doing something.

Commonly confused with

utilitarian: Utilitarian describes practical design or an ethical philosophy, while utility is the measure of satisfaction itself.

Word family

utilize (verb): To make practical and effective use of.
utilitarian (adjective): Designed to be useful or practical rather than attractive.

Collocations

maximize utility
marginal utility
diminishing utility
utility function

Example sentences

"Consumers aim to maximize their utility subject to budget constraints." Microeconomics
"The experiment demonstrated that people experience diminishing utility from consuming additional slices of pizza." Behavioral Studies

Memory hook

UTIL-ity = UTIL-ize something to gain satisfaction. How much satisfaction you get from using a product.

When not to use

Avoid confusing economic utility with a public utility company (like electricity or water providers) when writing academic papers.

Fun facts

Early economists attempted to invent a theoretical unit of measurement for satisfaction called a 'util'.