Question

Which of the following is a characteristic of utility?

• A. Utility is a psychological phenomenon
• B. Utility is subjective
• C. Utility is a relative concept
• D. All of these

Hint:

Utility is not a fixed property of a good; it's a personal, psychological, and situational feeling of satisfaction.

Answer 1

The Correct Option is D

Utility, the want-satisfying power of a commodity, has several key characteristics:

(A) Psychological Phenomenon: Utility is not inherent in the good itself but is a subjective feeling of satisfaction in the consumer's mind.
(B) Subjective: The utility derived from a good varies from person to person. A cup of coffee may have high utility for one person and none for another.
(C) Relative Concept: Utility is not absolute; it depends on time and place. A winter coat has high utility in a cold climate but very little in a tropical one.
All these statements are correct characteristics of utility.