Theory of Economics: What is the general utility

The law "the customer is always right" in the light of market relations can be paraphrased somewhat differently: "the consumer is always right". Ie, by and large, the market production is oriented to the consumers' requests. Their needs, interests and needs determine which goods, in what quantities, what modifications and even by what technologies should be produced by the producing firms. In turn, the market also dictates certain rights and rules. This process is dialectically interrelated and conditioned. But it is the consumer that can be considered the "last resort", because It is his own money that gives an assessment of the results of market actions.

With the choice of the consumer for some of the products associated with the so-called general utility of a product. We buy things, household appliances, foodstuffs in order to satisfy our needs and needs. From some purchases we get pleasure, others are needed to satisfy hunger, others - to provide comfort and coziness in the house, etc.

Almost every individual in the society is engaged in this or that sphere of labor, services, production. Some of them get moral satisfaction and material satisfaction from their work. Others are not entirely satisfied with the use of their forces, knowledge, abilities or the adequacy of payment for their services and labor.

The general usefulness of the benefits we receive is equal to the degree of satisfaction of our needs, which we receive when using goods, services, or when engaging in one or another activity.

Utility is considered a fairly subjective category. After all, the fact that one seems qualitative, worthy of attention, for another may not be of any value. Or, valuable at a certain point in time, under certain circumstances, some good ceases to be so when these circumstances change. For example, when a person is very hungry, for him a stale piece of bread is more valuable than gold. But, as saturation, bread loses its absolute value for it, and other benefits come to the fore.

In the economy, the total and marginal utility differ. The marginal utility is additional, it is added by each new consumed equivalent of the good. If we have two TV sets, then with the purchase of a few more, our pleasure and satisfaction will decrease with every next purchase. Those. A high evaluation of the utility of the good was only in the first stages of the acquisition. The more the number of identical goods, the less their usefulness.

The total and marginal utility of the good will be wound up to zero if there is an overabundance in the market, and prices will be high. But if the price is lowered, the utility of the good will increase, and the volume of purchases or the volume of demand for the goods will rise again.

Deficiency of goods - an alternative to its overabundance to maintain its marginal utility. Then the overall utility will be preserved, and the goods or services will be necessary, in demand.

Since the funds for the majority of consumers are limited, a person always has to compare the usefulness of the desired purchases and the possibilities of his budget. The consumer faces a dilemma - to choose such a combination of necessary things, products, etc., which would satisfy him as much as possible within his limited budget. And in this case, the choice will be influenced not only by the amount of marginal utility of the good that is contained in each subsequent product unit, for example, A, but also how much money, and therefore other types of goods, he will have to refuse to buy this product A And the overall utility in acquiring goods or receiving certain services and other things will satisfy a person under the condition that he distributes the budget funds so that each money symbol spent on buying brings the same marginal utility .