By utility we mean____________

1. Analyze the question The question asks for the definition of "utility" as used in Economics. It is not the everyday meaning of the word.

2. Explain the concept In Economics, utility is the satisfaction or want-satisfying power that a consumer gets from consuming a good or service. A good has utility if it can satisfy a human want. Utility does not mean the good is morally good or healthy. For example, cigarettes or alcohol have utility to those who want them, even though they may be harmful.

3. Solution: check each option

• A. Beneficial: Wrong. Something can give satisfaction without being beneficial (harmful goods still have utility).
• B. Power of satisfying a want: Correct. This is the standard textbook definition of utility.
• C. Advantageous: Wrong. This is similar to "beneficial" and is not about satisfying a want.
• D. Consumable: Wrong. This describes a good that can be used up. A good can have utility without being consumed, such as a house or a car.

4. Answer The correct answer is B. power of satisfying a want.

5. Tip Whenever you see "utility" in Economics, think satisfaction or want-satisfying power. Remember also the related terms:

• Total utility: the total satisfaction from all units consumed.
• Marginal utility: the extra satisfaction from consuming one more unit.