ECONOMICS
INCENTIVES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A hypothetical unit of measurement often used to quantify the level of utility
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Annual awards given for the most important breakthroughs and concepts in Economics
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Units that consumers are charged for use of water or electricity
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None of the above
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Detailed explanation-1: -Economists suggested that utility is measured in units called utils, which represents the satisfaction that consumers derive from consuming a given amount of goods or services.
Detailed explanation-2: -We can try to measure utility by using a hypothetical unit of measurement – utils. For example, if you go to a supermarket, you may feel a bag of apples gives you a moderate utility of 20 utils. By comparison, a large pizza may give a greater satisfaction of 50 utils.
Detailed explanation-3: -A “util” is an artificial measure of a consumer’s satisfaction from consuming a good. Economists measure total utility, or the total number of utils, a consumer receives from consuming a quantity of a good. Marginal utility is the additional utility a consumer receives from consuming an additional unit of a good.
Detailed explanation-4: -Utility can be measured in terms of utils. There was no standard unit of measuring utility which a person derives from consumption of goods and services. So the economists came up with an imaginary measure called util.
Detailed explanation-5: -In economics, the term utility refers to the happiness, benefit or value a consumer gets from a good or service. In other words, consumers are not satisficers who will settle for “good enough". This happiness or satisfaction is measured in a unit called a util.