A consumer has preferences over two goods represented by the utility function u(x₁, x₂) = 21+2√72. (a) Sketch this consumer's indifference curves. Solution: The indifference curves are conver, and are horizontal translations of each other. (b) Find the Marshallian demand function z(p, w).

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Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.