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Ryan P asked in Social ScienceEconomics · 1 decade ago

What are the importance of Utility Functions in the fields of Microeconomics?

also, kindly give me some websites that can prove its importance... thank you very much! :)

2 Answers

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  • 1 decade ago
    Favorite Answer

    utility function is very important in defining indifference curve and hence the demand curve. . . .

    secondly it also describes the consumer behaviour in different situations relating their income and prices.

    thirdly it also helps in finding allocative efficiency and pareto optimality.

    Source(s): www.en.wikipedia.org/wiki/Utility www.original.britannica.com/eb/topic-620713/utility www.economist.com/research/Economics/alphabetic.cfm?term=utility www.wps.prenhall.com/bp_casefair_econf_7e/30/7934/2031145.cw/index.html www.en.wikipedia.org/wiki/Pareto_efficiency
  • wexler
    Lv 4
    4 years ago

    Importance Of Utility In Economics

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