A Level Economics AQA Practice Exam

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What does utility measure in economic terms?

The total satisfaction from consuming a good or service
The total cost associated with producing a good or service
The amount of money spent on a good or service
The overall market demand for a good or service

The correct answer is: The total satisfaction from consuming a good or service

Utility is a concept in economics that quantifies the satisfaction or pleasure that an individual derives from consuming goods and services. It reflects the value that consumers place on goods and services based on their preferences and needs. When we say utility measures the total satisfaction from consuming a good or service, we are essentially discussing how much happiness or benefit a consumer receives from that consumption. This understanding of utility is foundational in making choices about consumption, as individuals aim to maximize their utility given their budget constraints. The other options, while relevant to different aspects of economics, do not capture the essence of utility as a measure of satisfaction.