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Our basic needs are simple, but our additional individual wants are often very complex. Commodities of different kinds satisfy our wants in different ways. A banana, a bottle of medicine and a textbook satisfy very different wants. The banana cannot satisfy the same wants as the textbook.
This characteristic of satisfying a want is known in economics as its 'utility'. Utility, however, should not be confused with usefulness. For example, a submarine may or may not be useful in time of peace, but it satisfies a want. Many nations want submarines. Economists say that utility determines 'the relationship between a consumer and a commodity'.
Utility varies between different people and between different nations. A vegetarian does not want meat, but may rate the utility of bananas very highly, while a meat-eater may prefer steak. A mountain-republic like Switzerland has little interest in submarines, while maritime nations rate them highly.
Utility varies not only in relation to individual tastes and to geo-graphy, but also in relation to time. In wartime, the utility of bombs is high, and the utility of pianos is low. Utility is therefore related to our decisions about priorities in production—particularly in a centrally-planned economy. The production of pianos falls sharply in wartime.
The utility of a commodity is also related to the quantity which is available to the consumer. If paper is freely available, people will not be so interested in buying too much of it. If there is an excess of paper, the relative demand for paper will go down. We can say that the utility of a commodity therefore decreases as the consumer's stock of that commodity increases.
Exercises 1
Answers these questions, basing your answers on the text.
1) What is the difference between our basic needs and our additional wants?
2) What two ways are there of describing ‘utility’?
3) What example is used to show that utility varies from person to person?
4) What example is used to show that it varies from nation to nation?
5) What example is used to show that it varies from time to time?
6) What example is used to show that utility is related to quantity?
7) What can we say about the way in which utility decreases?

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Тима77711
Тима77711
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I'd always wanted to go  to italy and visit rome, the vatican, florence, and see all the magnificent art there - and i wasn't disappointed! it's worth to learn speaking a bit of italian before you go. i managed to see quite a lot, but there was so much to see, and so many tourists! i can't stand to  queue and some places were impossible - you must-have seen the crowds being pushed  through places like cattle. but, as i say, it was my dream destination and it was marvellous. i'd planned to go  to venice, too, but didn't have time in the end.

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