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Utility

yoo-TIL-uh-tee /juːˈtɪləti/

nounC1GREGMATUPSC

FormalTechnical

In economics, the total satisfaction or benefit derived from consuming a good or service.

Utility is subjective and difficult to quantify directly. Economists often use 'marginal utility' (the additional satisfaction from one more unit) to analyze consumer choices.

The story behind the word. 'Utility' comes from the Latin word utilitas, meaning 'usefulness' or 'profitableness.' This root is also found in 'utilize' and 'utilitarian.' In economics, it was adopted to describe the subjective 'usefulness' or 'satisfaction' that a consumer gains from a good or service, a concept central to understanding consumer choice.

Word relationships

satisfaction: 'Satisfaction' is a general feeling of contentment, while 'utility' is the economic measure of benefit or pleasure derived from consumption.
benefit: 'Benefit' can be tangible or intangible; 'utility' specifically refers to the subjective satisfaction or value gained by a consumer.

disutility: The negative satisfaction or harm derived from consuming a good or service.

Commonly confused with

usefulness: 'Usefulness' is about practical function, while 'utility' is about the subjective satisfaction or value a consumer gets.

Word family

utilitarian (adjective): Designed to be useful or practical rather than attractive; (philosophy) relating to the doctrine of utilitarianism.
utilize (verb): To make practical and effective use of.

Collocations

marginal utility
total utility
diminishing utility
maximize utility

Example sentences

"A consumer aims to maximize their total utility given their budget constraint, choosing goods that provide the most satisfaction." Discussing consumer theory.
"The new software update significantly increased the utility for professional users, despite minor cosmetic changes." Analyzing product design.

Memory hook

Think of a 'U-TIL-ity' bill – you pay for the 'usefulness' (electricity, water) that brings you satisfaction. UTILITY = Usefulness/Satisfaction

When not to use

Avoid using 'utility' as a general synonym for 'usefulness' or 'practicality' outside of its specific economic or philosophical context, where it carries a precise meaning of satisfaction or benefit.

Fun facts

The concept of utility is central to utilitarianism, a philosophical theory that holds that the best action is the one that maximizes utility.

Explore more words

marginalism, utilitarianism, utilitarian, payoff, usability, economist