<Last updated 13.04.2020>
Hi! If you are interested in Economics, I’ve prepared the below to help you with the terminology. You should take a look at this short article where I which I discuss how we the consumers satisfy needs and wants and how economists measure satisfaction.
In the economy there are two categories of the means that people utilize in order for them to satisfy their needs. Goods and Services.
Goods are either intangible or tangible things that have some use for us and can be found in nature or can be produced by human beings. They are produced, bought or sold and then finally consumed for satisfying needs.
Some goods are free. They require no effort or money required to obtain them, for example the air we breathe, the sun rays that light our day. Economic goods on the other hand are the ones that are not free, they are produced and exist in limited quantities, so we can describe us scarce. They have a price and in order to produce them and finally consume them we have to engage in economic activities. They are the result of human effort, time and money.
When the consumer uses good, or when a service is provided to him, or her, the consumer feels satisfaction. In economics that satisfaction is called Utility. Goods that satisfy people’s needs are providing satisfaction but that does not mean that they are providing benefit for the well-being of a human being, for example cigarette or alcohol consumption: People satisfy the need but they are harming their own health.
While the consumer is consuming an additional unit of the good gains additional satisfaction, so additional utility. Additional but less utility gained each time a new unit is consumed. That additional utility is called Marginal Utility.
While the need is slowly satisfied, level by level, each time is satisfied even more reaching at some point when you feel full satisfaction.
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