Utility in economics refers to the satisfaction or benefit derived by consumers from consuming goods and services. It is a fundamental concept that helps explain consumer choices and the allocation of resources in a market economy.

Utility

Utility in economics

satisfaction or benefit

Consumption of goods and services

fundamental concept

consumer choices

Allocation of resources is the process of distributing available resources among various projects or business units. The aim is to use resources as efficiently as possible to maximize outcomes and meet organizational objectives.

allocation of resources

A market economy is an economic system where decisions regarding investment, production, and distribution are guided by the price signals created by the forces of supply and demand. It emphasizes minimal government intervention, allowing the free market to allocate resources efficiently based on consumer preferences and competition.

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