Utility

In economics, utility is the measure of consumer satisfaction in obtaining a product.

Assuming the validity of this measure, one can speak with the intention of increasing or decreasing utility, and thus explain economic behavior in terms of attempts to increase utility. It is worth mentioning that consumer satisfaction is personal and therefore subjective. The individual decides what value to give to that satisfaction.

Utilitarianism saw utility maximization as a moral criterion for the organization of society. According to utilitarians, such as Jeremy Bentham and John Stuart Mill, society should aim to maximize the total utility of individuals. From this perspective, utility is understood as "The property of an object by which it tends to produce benefit, advantage, pleasure, good or happiness". From this point of view, it is suggested that an economy is efficient to the extent that it produces the greatest possible "satisfaction" or "utility" for the participants in its activities.

The concept is often applied by economists in constructs such as indifference curves, which plot the combination of products that an individual or a society would accept to maintain a given level of satisfaction. Individual utility and social utility can be represented as the dependent variable in a utility function; for example, in indifference curves or social welfare functions. When these functions are combined with production constraints or basic inputs, and given some assumptions, they can represent Pareto efficiency, as illustrated for example by the Edgeworth box. This efficiency is a central concept in welfare economics. Author: Thani Nicolle Mamani Ticona

Total utility

Total utility is the full satisfaction that an individual achieves when acquiring or consuming a good or service.

Marginal utility

Marginal utility is the decrease in satisfaction, depending on the increase in a good purchased. That is, satisfaction decreases in proportion to the increase in units (utility).

For example, if a child at a party consumes a chocolate bar, it will give him 10 "useful" (utility measurement unit). The second will give you 15 tools (this gives us a total of 25 tools since the utility of each bar is added). From the third bar, the utility decreases because it reaches a saturation point.

Number of chocolate bars	Marginal utility	Total profit
1	10	10
2	15	25
3	12	37
4	10	47
5	5	52
6	0	52
7	-5	48
8	-10	38

The previous table tells us how, while the marginal utility is decreasing, the total utility is ascending until the so-called saturation point is reached, since the more consumed, the less utility is obtained.

Critique

Economist Joan Robinson called the concept of utility circular: "Utility is the quality of commodities that makes people want to buy, and the fact that people want to buy commodities shows that they have utility." (Robinson, 1962:48)

Different value systems have different perspectives on the use of "utility" to make moral judgments. For example, Marxists, Kantians, and some liberals (eg, Nozick) believe that utility is irrelevant as a moral criterion or at least not as important as factors such as natural rights, laws, conscience, and/or doctrine. religious. It is debatable if some of these suggestions could be adequately represented in a theoretical scaffolding that has "utility" as support.

Another criticism stems from the claim that neither cardinal nor ordinal utility is empirically observable in the real world. In the case of cardinal utility it is not possible, for example, to measure a "quantitative" level of satisfaction when someone consumes/buys an apple. In the case of ordinal utility, it is impossible to determine which options were contemplated and which ones and on which bases some were implemented when someone buys, for example, an orange. Any act implies a particular preference in relation to an infinite possibility of options, such as: apple, orange juice, vegetables, vitamin C tablets, no shopping, exercise, etc.