Answered: Define the terms "use value" and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Define the terms "use value" and "non-use value" with an example.

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Use value refers to the want satisfying power of the good or the utility derived from the consumption of a good. It can be computed by using the indifference curve of the consumer. It is derived from the direct use of the good. The amount of consumption is substituted in the utility function of the consumer and thus the level of utility is computed. example utility from consuming a good.

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