Utility || What is Utility in Agricultural Economics? || Types of Utility

 Utility

• Utility can be defined as wants satisfying power of a good.

•Utility, in economics, refers to the usefulness or enjoyment a consumer can get from a service or good.

•Economic utility can decline as the supply of a service or good increases.

•Marginal utility is the utility gained by consuming an additional unit of a service or good.

Types Of Utility :- 

1. Form Utility

2. Place Utility 

3. Time Utility

4. Possession Utility

1. Form utility :- Changing the form of a good greater utility is created. It doesn't mean that before change of form good there was no utilities, it means the change in the form offers greater utilities to goods.

Example:-  •Processing of paddy to rice.

•Wheat to Flour.

•Coffee beans to coffee powder.

2. Place Utility :- By virtue of its position in an area the commodity will have different utilities. 

I.e. Spatial movement of goods from one place to another place. 

Example- Apples are made available to different areas of India from Himachal Pradesh.

3. Time Utility :- Any time lag between production and consumption of commodities creates time utility.

i.e. storage helps to create time utility.

 Example- Agricultural commodities like paddy, wheat, oil seeds, pulses are stored to make them available for the regular use of consumer throughout the years.

4. Possession Utility :- commodities in the transactions process, changes the hands from one person to another persons.

  Example- farmers are having less utility compared to that of consumer in the form of rice.

× Characteristics of Utility :-

1. Utility is subjective (It depends upon individual frame of mind utility varies from person to person).

2. Utility depends on purpose (Depending upon the purpose for which the commodity is used utility of the same varies).

3. Utility varies with time (A particular good give different utilities for the same person in different time periods).

4. Utility varies with ownership (Ownership of a good creates for greater utility form a good than that when it is hired).

5. Utility not be equal with pleasure (Utility derived from a commodity need not be associated always with pleasure for the consumer).

6. Utility does not mean satisfication (Utility is not satisfication by itself).