Skip to content
MarkSchemeMarkScheme
Sign up — no card

9708 · 7.1

Utility

**Utility** (7.1) underpins **consumer theory** in microeconomics. Link the **MU curve** to the **demand curve** and apply the **equi-marginal principle** in calculations.

Need to know

What you need to know

  • Utility is the satisfaction or economic welfare gained from consumption.
  • It is a subjective concept, varying between individuals and over time.
  • Economists use a hypothetical unit, 'utils', for theoretical analysis.
  • The core assumption is that rational consumers aim to maximise their total utility.

Explanation

Utility

  1. Utility is the satisfaction or economic welfare gained from consumption.
  2. It is a subjective concept, varying between individuals and over time.
  3. Economists use a hypothetical unit, 'utils', for theoretical analysis.
  4. The core assumption is that rational consumers aim to maximise their total utility.
Mark this topic →Open full visual lesson