The document discusses the concept of utility in economics, tracing its origins to Daniel Bernoulli and exploring both cardinal and ordinal utility. It highlights debates among economists regarding the measurement of utility, with some advocating for quantitative methods while others argue it is subjective and qualitative. The text also provides examples to illustrate these theories, emphasizing the varying perceptions of utility based on personal preferences.

1. Concept of Utility
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2. Utility
• Utility in Economics was first invented by
the noted 18th-century Swiss
mathematician Daniel Bernoulli
• Economic theory has progressed, leading to
various types of Economic utility.

3. Utility
• In Micro Economics, Utility is a Controversial Topic
• It is generally used to describe the degree of
satisfaction an individual receives from
consuming a commodity
• ఇది వినియోగదారుల కోరికలను తీరచడానికి ఒక వస్ు
ు వు
యొకక శకిుగా అరథం చేస్ుకోవచ్ుచ

4. Utility
• The commodity fulfills or is expected
to fulfill the need of the consumer, the
commodity is said to have utility

5. Example
ఆకలితో ఉనన వయకిు బనున తన ఆకలిని తీరుస్ు
ు ంది
అని ఆశంచి బనున క ంటాడు. దీని అరథం బన్‌
కు
యుటిలిటీ ఉంది

6. Utility
• All Economists would agree that the
person has gained utility by
consuming the bun
Measuring the Utility
• Different Economists have different
views

7. Measuring of Utility
• Different Economists have different views
• చాలా మంది ఆరిథకవేతులు యుటిలిటీని
స్ంఖ్ాయపరంగా క లవవచ్చని పేరకకన్ానరు
• యుటిలిటీ ఒక ఆతాాశరయ దృగిిషయం అని చాలా
మంది వాదించారు, ఇది పరిమాణాతాకంగా
వయకుపరచ్బడదు

8. Measuring the utility
• ఈ భిన్నఅబిప్రయాలే ప్రయోజనాన్నన ఎలా కొలవాలి
అనే విశ్లేష అభివృద్ధి కి తోడ్పడింద్ధ.
• The concept of
Cardinal and Ordinal Utility

9. Cardinal Utility
• Classical Economists utility is a
quantitative concept and that it can be
measured in terms of a number
• Utility varies from person to person
place to place and time to time

10. Cardinal Utility
• Since util is not a standard unit for
measuring utility
• Many economists, including Alfred
Marshall suggested measurement of
utility in terms of money that consumers
are willing to pay for a commodity

11. Example
• If a person allocate 20 utils to a Vada, and 10
utils to a upma, we can understand that the
Vada has double the capacity to satisfy that a
parson
upma 10 utils Vada 20 utils

12. • ఆల్రెడ్్‌మారషలత
ు ్‌స్హా్‌చాలా్‌మంది్‌ఆరిథకవేతులు్‌
వినియోగదారులు్‌ఒక్‌వస్ు
ు వు్‌కోస్ం్‌చెలిలంచ్డానికి్‌
సిదధంగా్‌ఉనన్‌డబుు్‌పరంగా్‌యుటిలిటీని్‌
క లవాలని్‌స్ూచించారు

13. Ordinal utility
• Modern Economists claimed that
absolute measurement of utility is not
possible
• Utility is subjective phenomenon
influenced by personal feelings,
preference and opinions, so it not
quantifiable.

14. Ordinal utility
• Utility can be clearly expressed in terms
of rank

15. Example
• If a person prefers fruit juice to goli
soda, it means fruit juice has more
utility than soda. In this case, fruit juice
can be placed in the first position and
soda in the second, in terms of utility.

16. Cardinal Utility Vs Ordinal Utility
Compariso
n
Cardinal Utility Ordinal
utility
Approach Quantitative Qualitative
Realistic Less More
Measurement Utils Rank
Analysis Marginal Utility Analysis Indifference Curves
Promoted by Classicals and neo- Classicals Modern

17. Thank You