UTILITY

Our basic needs are simple, but our additional individual wants are often very
complex. Commodities of different kinds satisfy our wants in different ways. A
banana, a bottle of medicine and a textbook satisfy very different wants. The banana
cannot satisfy the same wants as the textbook.

This characteristic of satisfying a want is known in economics as its “utility”. Utility,

however, should not be confused with usefulness. For example, a submarine may or
may not be useful in time of peace, but it satisfies a want. Many nations want
submarines. Economists say that utility determines “the relationship between a
consumer and a commodity”.

Utility varies between different people and between different nations. A vegetarian
does not want meat, but may rate the utility of bananas very highly, while a meat-
eater may prefer steak. A mountain-republic like Switzerland has little interest in
submarines, while maritime nations rate them very highly.

Utility varies not only in relation to individual tastes and to geography, but also in
relation to time. In wartime, the utility of bombs is high, and the utility of pianos is
low. Utility is therefore related to our decisions about priorities in production-
particularly in a central planned economy. The production of pianos falls sharply in
wartime.

The utility of a commodity is also related to the quantity which is available to the
consumer. If paper is freely available, people will not be so interested in buying too
much of it. If there is an excess of paper, the relative demand for paper will go
down. We can say that the utility of a commodity therefore decrease as the
consumer’s stock of that commodity increases.

Reading Comprehension

Exercise 1: Answer the following questions.

1. What is the basic different between basic needs and additional individual
wants?
 Basic needs are simple, people only need a Food, Water, Shelter and
Clothes. Then the additional individual wants are very complex, for
satisfy our wants, like a car, gadget, and you wanna eat an italian food.
2. What is your understanding on Utility? Is it the same as usefulness?
 Utility is the charateristic of satisfying a want and rate of benefit for
someone, utility determines “the relationship between a comsumer and
 a comodity, so if consumers buy the commodity they want, then the
consumer will be satisfied, that satisfaction is utility. But utility is not
only in relation to individual tastes and to geography.
 Utility is similar to usefulness but different, usefulness just benefit we
get from a commodity.
3. Utility varies between:
a. People: a vegetarian and meat eater
 A vegetarian rate the utility vegetables or fruit very highly than
meat, and the meat eater too rate the utility of meat very highly, for
vegetarians prefer bananas and the meat eater prefer fried chicken.
b. Time: war-time and peace-time
 In war time, the utility of nuclear is high than a book, but in peace-
time the utility of book is high than nuclear, cause in peace time
books are much more useful, and nuclear is useless.
c. Place: a mountain-republic and a maritime nation
 In a mountain-republic, the utility of boat is low than car, and in a
maritime nation, the utility of boat is high than car, cause a
maritime nation have a many island so boat is usefull for cross the
sea.
d. Quantity: increasing stock and decreasing stock
 When there is a lot of demand for pens, the pens increasing stock
and the utility of pens is high, but if the demand is few the pens
decreasing stock, and the utility of pens is low.

Explain each of them and give examples!!!

Exercise 2: True or False

1. Our basic needs are complex. (false) cause our basic needs are simple.

2. Vegetarians rate the utility of meat very highly. (false) vegetarians doesn’t want
meet, they rate a vegetables or fruits very highly.

3. The demand of paper goes down if the quantity of paper increases. (true) cause if
the quantity of paper increase, the relative demand for paper will go down.

Vocabulary

Exercise 1: Find single words in the text for which these words could be substituted.
1. Extra: additional

2. Quality: kind (characteristic)

3. Coastal: maritime

4. Likes and dislikes: want and not want (desire)

5. Preferences: priorities (tastes)

Exercise 2: Fill in the correct answer.

Bargain supplies government invest economists

1. The government of a capitalistic country is not to be expected to concern with

central planning.

2. In some systems it is of course possible for an individual to Bargain over prices.

3. economists call this tendency the Law of Diminishing Marginal Utility.

4. supplies of many commodities can generally be adjusted to suit market

conditions.

5. He decided to invest his capital in the new enterprise.

Structure

Exercise 1: Identify Passive or Active sentences.

Tobe+V3

1. The grapes are grown in California. (passive) (Simple Present)

2. The police didn’t find the robber last week. (active) (Simple Past Tense)

3. My friends have been looking forward to meeting her. (active) (Present Perfect
Continuous)

4. I will never forget this experience. (active) (Simple Future Tense)

5. The movie was being made in Hollywood. (passive) (Past Continuous Tense)

6. His hair was cut by a professional. (passive) (Simple Past Tense)

7. The first fast food restaurants were opened in the USA in 1916. (Active) (Simple
Past Tense)

8. Henry Ford invented the assembly line. (active) (Simple Past Tense)

9. Everybody was shocked by the terrible news yesterday. (passive) (Simple Past
Tense)

10. When the manager arrived, the problem has already been solved. (Passive)
(Present perfect tense)

Exercise 2: Change the following sentences into passive sentences.

1. We set the table (Simple present tense) (S+is/am/are+V3+by)

 The table is set by us

2. We have done our homework. (Present Perfect Tense) (S+have/has+been+V3+by)

 Our homework havebeen done by us.

3. The government is planning a new road near my house. (Present Continuous

Tense)

(S+is/am/are+being+V3+by)

 A new road is being planed by the government near my house.

4. My grandfather built this house in 1943. (Simple Past Tense) (S+was/were+V3+by)

 This house was built by My grandfather in 1943.

5. Somebody should do the work. (Modal verb+be+V3)

 Work should be done.

6. A workman will repair the computer tomorrow. (Simple Future Tense)

(S+will+be+V3+by)

 The computer will be repaired by a workman tomorrow.

7. Somebody must have taken my wallet. (Present Perfect Tense)

(S+have/has+been+V3+by)

 My wallet must have been taken by somebody

8. Susan puts the bags on the floor. (Simple Present tense) (S+is/am/are+V3+by)
  The bags are put by susan on the floor.

9. An old woman feeds the pigeons. (Simple Present tense) (S+is/am/are+V3+by)

 The pigeons are fed by an old woman.

10. She has just found her cat in the garden. (Present Perfect Tense)
(S+have/has+been+V3+by)

 Her cat has just been found by her in the garden.