Question

1121
In economics, a commodity possesses utility irrespective of its being
good or bad. Thus, in economics, both milk and poison possess utility
Utility never takes into account the concepts such as good and bad or moral
and immoral, etc. Therefore, utility is ethically neutral.
Utility is the feeling of a consumer towards a particular commodity.
Utility does not have physical existence. It is abstract in nature. Therefore,
utility is a psychological concept.
Utility depends upon the intensity of want. When an individual consumes
the first unit of commodity he finds the maximum utility from it. But at the
time of consumption of second unit of the same commodity, the intensity of
want decreases. Therefore, the individual finds the further units of
consumption less important. Therefore, marginal utility diminishes with the
increase in the stock.
Questions :
(1) Explain the concept of utility with reference to its ethical neutrality. (2)
(2)
(ii) Explain the reason for diminishing nature of utility.​

Answer 1

Answer:

Utility is ethically neutral or concept of utility has no moral consideration. It means that utility is the satisfaction of any want, moral, immoral, right or wrong. It does not see if the want is ethically right or not. For example, a knife can be used in the kitchen but it can also be used to kill someone. In both the cases, the want is being satisfied.