Q.What is utility? Explain the various types of utility.

Utility is the want-satisfying power of a commodity or service. It is subjective and has no moral meaning. Its chief types are: form utility, place utility, time utility, service utility and possession (ownership) utility — each created by changing the form, place, time, service or ownership of a good. ## Meaning of utility Utility means the capacity of a good or service to satisfy a human want. For example, water satisfies thirst, so water has utility. Utility is: - subjective — it varies from person to person; - relative — it changes with time and place; - ethically neutral — even harmful things (liquor, cigarettes) have utility if they satisfy a want. ## Types of utility 1. Form utility: created by changing the form or shape of a good. Example: converting cotton into cloth, or wood into furniture, adds form utility. 2. Place utility: created by moving a good from a place where it has less use to a place where it has more use. Example: carrying vegetables from the farm to the city market. 3. Time utility: created by storing a good and supplying it at the time it is most needed. Example: storing foodgrains after harvest and selling them during scarcity. 4. Service utility: created by rendering personal services. Example: the services of a doctor, teacher or lawyer give service utility. 5. Possession (ownership) utility: created when a good **passes into the ownership of the perso …