Eco 101 Online Quiz and Discussion (Utility and others)—-6/3/2023

NAME: AGBOEZE AMARACHUKWU SUCCESS
REG. NO: 2018/247084

1) Briefly discuss the elementary theory of utility.
Utility theory is based on the fact that satisfaction which consumers derived from consumption of goods and services can be measured quantitative

2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.
We have two predominant schools of thought of utility and they are Cardinal utility and Ordinal utility
The Cardinal utility believes in measuring the satisfaction level in utility while the Ordinal utility believes that the satisfaction level cannot be evaluated; however, it can be levelled

3) Explain the demand for and pricing of productive factors emphasizing on the labour market.
The demand for labour shows how many workers the firms are willing and able to hire at a given wage rate at a given time. Labour demand is derived from the demand for a product or a service that labour produces.

1) Utility theory bases its beliefs upon individuals’ preferences. It is a theory suggested in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences. Each individual will show different preferences, which appear to be hard-wired within each individual. We can thus state that individuals’ preferences are inherent. Any theory, which proposes to capture preferences, is, by necessity, abstraction based on certain assumptions. Utility theory is a positive theory that seeks to explain the individuals’ observed behavior and choices.
Utility theory in economics is relate to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness.

2) Ordinal Utility
Cardinal Utility.

The Ordinal Utility approach is based on the fact that the utility of a commodity cannot be measured in absolute quantity, but however, it will be possible for a consumer to tell subjectively whether the commodity obtain more or less or equal satisfaction when compared to another.
In economics, an ordinal utility function is a function representing the preferences of an agent on an ordinal scale. Ordinal utility theory claims that it is only meaningful to ask which option is better than the other, but it is meaningless to ask how much better it is or how good it is.
Ordinal utility just ranks in terms of preference.

Cardinal Utility is the idea that economic welfare can be directly observable and be given a value,that is cardinal utility gives a value of utility to different options.
For example, people may be able to express the utility that consumption gives for certain goods. For example, if Ovaltine gives 500 units of utility, bornvita would give 800 units. This is important for welfare economics which tries to put values on consumption.

3) Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is fixed by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.

A profit-maximizing entity will command additional units of labor according to the marginal decision rule: If the extra output that is produced by hiring one more unit of labor adds more to total revenue than it adds to the total cost, the firm will increase profit by increasing its use of labor. It will continue to hire more and more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor.

Mmesomachukwu Mercy Okoli
PALG
Eco 101 Assignment
2020/252073

Name; Chimezie Temple Chimereze
Reg No:10844834HE

1: The Concept of Utility Theory Utility theory is based on the fact that satisfaction which consumers derived from consumption of goods and services can be measure quantitative.

2: However, cardinal utility and ordinal utility are the two predominant theories of utility. The cardinal utility believes in measuring the satisfaction level in utils and the ordinal utility believes that the satisfaction level cannot be evaluated; however, it can be levelled.

3: According to the law of diminishing marginal returns, by definition, in most sectors, eventually the MPL will decrease. Based on this law: as units of one input are added (with all other inputs held constant) a point will be reached where the resulting additions to output will begin to decrease; that is marginal product will decline.

Another consideration is the marginal revenue product of labor (MRPL), which is the change in revenue that results from employing an additional unit of labor, holding all other inputs constant. This can be used to determine the optimal number of workers to employ at a given market wage rate. According to economic theory, profit-maximizing firms will hire workers up to the point where the marginal revenue product is equal to the wage rate because it is not efficient for a firm to pay its workers more than it will earn in revenues from their labor.

Common Reasons for a Shift in Labor Demand

Changes in the marginal productivity of labor, such as technological advances brought on by computersChanges in the prices of other factors of production, including shifts in the relative prices of labor and capital stockChanges in the price of an entity’s output, usually from an entity charging more for their product or service

1. In economics, utility theory governs individual decision making. The student must understand an intuitive explanation for the assumptions: completeness, monotonicity, mix-is-better, and rationality (also called transitivity).

Utility theory bases its beliefs upon individuals’ preferences. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences. Each individual will show different preferences, which appear to be hard-wired within each individual. We can thus state that individuals’ preferences are intrinsic. Any theory, which proposes to capture preferences, is, by necessity, abstraction based on certain assumptions. Utility theory is a positive theory that seeks to explain the individuals’ observed behavior and choices.The distinction between normative and positive aspects of a theory is very important in the discipline of economics. Some people argue that economic theories should be normative, which means they should be prescriptive and tell people what to do. Others argue, often successfully, that economic theories are designed to be explanations of observed behavior of agents in the market, hence positive in that sense. This contrasts with a normative theory, one that dictates that people should behave in the manner prescribed by it. Instead, it is only since the theory itself is positive, after observing the choices that individuals make, we can draw inferences about their preferences. When we place certain restrictions on those preferences, we can represent them analytically using a utility function—a mathematical formulation that ranks the preferences of the individual in terms of satisfaction different consumption bundles provide. Thus, under the assumptions of utility theory, we can assume that people behaved as if they had a utility function and acted according to it. Therefore, the fact that a person does not know his/her utility function, or even denies its existence, does not contradict the theory. Economists have used experiments to decipher individuals’ utility functions and the behavior that underlies individuals’ utility.

2. Ordinal Utility

Early economists of the Spanish Scholastic tradition of the 1300s and 1400s described the economic value of goods as deriving directly from this property of usefulness and based their theories on prices and monetary exchanges.

This conception of utility was not quantified, but a qualitative property of an economic good. Later economists, particularly those of the Austrian School, developed this idea into an ordinal theory of utility, or the idea that individuals could order or rank the usefulness of various discrete units of economic goods

Cardinal Utility

To Bernoulli and other economists, utility is modeled as a quantifiable or cardinal property of the economic goods that a person consumes.To help with this quantitative measurement of satisfaction, economists assume a unit known as a “util” to represent the amount of psychological satisfaction a specific good or service generates for a subset of people in various situations. The concept of a measurable util makes it possible to treat economic theory and relationships using mathematical symbols and calculations.
Total Utility

If utility in economics is cardinal and measurable, the total utility (TU) is defined as the sum of the satisfaction that a person can receive from the consumption of all units of a specific product or service.Using the example above, if a person can only consume three slices of pizza and the first slice of pizza consumed yields ten utils, the second slice of pizza consumed yields eight utils, and the third slice yields two utils, the total utility of pizza would be twenty utils.
Marginal Utility

Marginal utility (MU) is defined as the additional (cardinal) utility gained from the consumption of one additional unit of a good or service or the additional (ordinal) use that a person has for an additional unit.1

Using the same example, if the economic utility of the first slice of pizza is ten utils and the utility of the second slice is eight utils, the MU of eating the second slice is eight utils. If the utility of a third slice is two utils, the MU of eating that third slice is two utils.

3. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.

Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.
Changes in the marginal productivity of labor, such as technological advances brought on by computers

Changes in the prices of other factors of production, including shifts in the relative prices of labor and capital stock

Changes in the price of an entity’s output, usually from an entity charging more for their product or service

Changes in the marginal productivity of labor, such as technological advances brought on by computers

Changes in the prices of other factors of production, including shifts in the relative prices of labor and capital stock

Changes in the price of an entity’s output, usually from an entity charging more for their product or service

Changes in the marginal productivity of labor, such as technological advances brought on by computers

Changes in the prices of other factors of production, including shifts in the relative prices of labor and capital stock

Changes in the price of an entity’s output, usually from an entity charging more for their product or service

Question 1In economics, utility theory tries to explain the behavior of individual consumers in an economy. Utility theory argues that each person, given a list of options, can rank those options in a precise order of preference. Each person has different choices which are set, not changing over time

Question 2
Utility theory. bases its beliefs upon individuals’ preferences. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences, it is the ability of a commodity to satisfy human wants.

Question 3
If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase. This would shift the labour demand curve outwards.

Name: Idoko Odinaka Peace
Registration Number: 2020/242102
Department: Nursing Science
1) Briefly discuss the elementary theory of utility.
The utility of a good or service is determined by how much satisfaction a particular consumer obtains from it. Utility theory bases it’s beliefs upon individuals preferences. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences. We can thus state that individuals’ preferences are intrinsic. Utility theory is a positive theory that seeks to explain the individuals’ observed behavior and choices. This contrasts with a normative theory, one that dictates that people should behave in the manner prescribed by it.
2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.
The cardinalist school asserts and believes in measuring the satisfaction level in utils. It means, it is possible to express utility that an individual derives from consuming a commodity in quantitative terms.
The ordinal school asserts that the satisfaction level cannot be evaluated, however it can be levelled.
3) Explain the demand for and pricing of productive factors emphasizing on the labour market.
The demand for any factor of production, such as labor, physical capital or land is a derived demand because it arises not from the intrinsic utility provided by the factor but because of the value placed on the production it produces by consumers. If labour productivity increases, firm will demand more labour at each wage rate and the firms demand for labour itself will increase. This will shift the labour demand curved outwards.
Change in technology can cause the demand for labour to increase and decrease depending on the situation.
However with the production and subsequent competition from other firms, we could assume that chip development could become automated. The subsequent result would be a replacement of labour with machines. This would shift the labour demand curve inwards.

1) utility is defined as the amount of satisfaction actioned from the use of commodity at a particular time.
2) they are * ordinal utility
* cardinal utility
3) The labor market is the area where labor supply meets labor demand. Employment refers to the formal relationship between those who sell their labor and those who purchase it (i.e., the relationship between employees and employers.

1. Utility theory in economics pertains to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness. The premise was initially theorized by Swiss mathematician, Daniel Bernoulli, in the 18th century. Bernoulli founded the idea with regard to the differing values of things. With respect to theory, the utility of an item tends to be closely correlated to its price. An item such as gold, which is very useful and thus has great utility (combined with its scarcity), is very expensive. Total utility is closely tied to the bare concept of utility. Total utility points to the aggregate amount of usefulness and fruition there is to be gained from the use of a specific good, service, or other item. Furthermore, the abstract measurement of utility is another key concept of the theory. Although it’s hard to calculate the exact utility of something, economists use abstract measurements to capture the usefulness of things.
2. In Plato’s Republics and in his other writings we see a development of idealism. According to him, every object of our experience is nothing but shadow. That is saying that it is not in a pure state of reality. Whatever we perceive is merely a poor copy of the reality that exists in another world which he designates as the world of Forms or Ideas. Thus Plato’s Idealism talks of two worlds: the world of shadows and the world of Ideas. The latter is replete with absolute perfection, real, unchangeable, universal and eternal realities whereas the former is the world of imperfect copies of things residing in the real world of ideas. The implication is that every material thing must have its true copy in the world of ideas. Idealist would say that even the pen you are having now is only an imperfect copy or a shadow of the ideal pen in the world Ideas. Though there may ne various strands of idealism, the basic tenet is the emphasis that existence is explained in terms of the mind and its function.

Other Views on Idealism

Since Plato, there have been many understanding of idealism. Descartes is one such Idealist. He holds that the most important element in the nature of knowledge is mind or spirit. This idea is beautifully expressed in his popular philosophical dictum. Corgito ergo sum (I think, therefore I exist). This idealistic statement has so much implication for Descartes who doubted the reality of anything having material nature and would only accept as reality the thought that he is thinking. Bishop George Berkeley also advanced the school of idealism in modern times by his esse est percipi (to be is to be perceived) . What is real is that which can be perceived, what cannot be perceived is unreal.

To put it more correctly again, the central thesis of idealism is that true knowledge can be derived from reason alone since it is only the faculty of reason that can grasp or extract from material things their spiritual forms or essences. The faculty of the senses provides the mind with imperfect, unstable and changing knowledge of physical objects.

Educational Implication of Idealism

1. For Plato, Education simply means stimulation of the mind to recall that which it already knows before its being in the world. He taught that the soul I born with innate knowledge which it lost with contact with the material world (human body). Thus the concept of school and education is to create an enabling environment where students are encouraged to recall and embrace the concept of the Good and the universal truth that already exist in their soul which has been forgotten. An idealistic educational system would concern itself with ideas of things. The goal of education should be connected with the lifetime work of searching for true ideas. It should be to cultivate the human mind.

2. Idealism prefers the world of the spiritual to the world of material things. Thus, in education, effort is made to create an enabling environment for the orientation of the youngster towards spiritual things or toward ideas.

3. As a result of the basic tenet of Idealism, educational curriculum is made of humanities (languages, literature, philosophy, religion, etc) and social studies. These subject are idea-based. Thus they are to awaken in students the basic ideas of the universe. They help in the cultivation of the mind. Not that idealist do not consider physical training, vocational training and sciences, they consider them but only in the subordinate manner.

Realism

Realism as a philosophy is traceable to Aristotle, the famous student of Plato, (384-322 BC). He is acclaimed to be the father of realism just as Plato is believed to be the propounder of idealistic tradition in Western Philosophy.

The contention of Realism is that objects of our sensual perceptions are real in themselves, whether the mind perceives it or know it or not. The basic tenet of realism is that reality and knowledge of things can be acquires independent of the mind that perceives them. In other words reality is extramentasl and not intramental, i.e. it exists outside the mind and not within the mind as ideas. The implication of the realist epistemology is that everyday experience is true knowledge. “Our dependable knowledge if external reality is possible. Physical reality asserts, as fact, that the actual sticks, stones and trees of the universe exist whether or not there is a human mind to perceive them”. Ozmon & Craver (1995). “The realist prioritizes a worl of ‘things; as opposed to a world of idea Jacobsen, (1842-1910).

Some of the proponents of Realism are Baruch Spinoza (1632-1677), John Locke (1632-1704), American Philosopher-Psychologist, William James, (1842-1910), etc.

Realism is antithetical to Idealism. It upholds that the view that matter is real and not shadows or “copies” of the real which exist in the spiritual/immaterial world. In its proposition, realism says that our concrete materials world is capable of furnishing human mind with reality. And these realities are independent of the perceiving mind. It is in opposition to \berkeleyan theory of esse est percipi (to be is to be perceived) which virtually equares existence with perception such that an object cannot be said to exist if there is no body or some ‘mind’ to perceive it. Agudosi (2033:58)

Realism is like an umbrella term that covers many other philosophies which can be said to be sub-schools of realism. These sub-schools believe that reality is perceptible, concrete and outside the mind. Thus we have the following ‘Realisms’.

1. Aristotelian Realism

2. Scholastic Realism

3. Natural or Scientific Realism

Aristotelian Realism: This is also known as classical realism because it is the premier realism of western culture. As the name suggests, it is an intellectual product of Aristotle. He was a student of Plato, but disagreed with his master on what is the nature of human knowledge. Do we actually perceive things the way they are, or do we perceive them as they appear to us? That is to ask if the concrete data of our experiences are real or imaginary? That is why he wrote on almost all the fields of human knowledge: poetry, rhetoric, ethics, politics, meteorology, embryology, physics, mathematics, metaphysics, anatomy, physiology, logic, dreams and so forth.

“Aristotle viewed reality as a uniting of both actuality (form) and potentiality (matter). Both must be united in order for something to be real or to truly exist”, and that is the principle of his Aristotelian Hylemorphism. All things are made of matter. What makes one matter different from another? It is the form (morphe), the differentiating or the individuating principle of matter. It is evident that every object of our daily experience is made up of matter and form and it is this co-existence of matter and form in reality that Aristotle designates as Hylemorphism. It is then the form that make something what it is, as against or different from what is not. When both matter and form are not present, knowledge is not possible.

Aristotle described the relationship between form and matter with the Four Causes:

Material cause – the matter from which something is made;
Formal cause – the design that shapes the materials object;
Efficient cause – the agent that produces the object; and
Final cause – the direction toward which the object is tending.
Through these different forms, Aristotle demonstrated that matter was constantly in a process of change. He believed that God, the Ultimate Reality held all creation together. Organization was very important in Aristotle’s philosophy. He maintained that human beings as rational creatures are fulfilling their purpose when they think, and thinking are their highest characteristic.

Furthermore, realism unlike idealism does not talk about dual world of matter and form in order to explain human knowledge. For realists, there is only “a world” of reality.

Educational Implications of Realism

1. Religious realists do not limit knowledge to the phenomenal world alone, but hold that knowledge acquired through the senses is real; rational knowledge does not form the entire domain of reality. There is a being responsible for their existence. The cosmos are real, and they point to the existence of a higher Being. Furthermore, the study of God reveals that man always depends on God for his perfection and self-fulfillment. Therefore, education must recognize and incorporate this fact. Okafor (1981) writes that this is the basic educational task of scholastics. “The two domains (the natural and the supernatural) are complimentary elements in man’s effort towards the attainment of his ultimate self-fulfillment and complete actualization”.

2. The scientific realism sees the environment and the training of the senses for perception as against empty memorization of abstract things. It is a total rejection of the classical method whereby the child is made to memorizing knowledge by rote system. The child is given enormous freedom to discover knowledge and is given freedom to think through situations rather than accepting authority as source of human knowledge. One major criterion for knowledge here is the inductive method of observation, experimentation, formulation of hypothesis and laws which eventually form what is known today as scientific knowledge. This implies that nay knowledge that cannot be verified inductively is committed to the flames, and more so are dogmas. Education is better dome God-free.

Appreciable is the influence of Scientific knowledge to life. It has actually advanced the welfare of man in the society. But care must be taken not to reduce life to what can be tested, evaluated and decided in the laboratory. Life is always larger than scientific logic.

Pragmatism

Pragmatism is generally viewed as American philosophy. It emanated in the later part of the nineteenth century. The proponents of this philosophical tradition are George Sanders Pierce (1839-1914), William James (1842-1910) and John Dewey (1839-1914) Pragmatism comes from the Greek word pragma meaning work. Pragmatists hold that activity or experiment is done first, and then on the basis of the result, principles and ideas derived. That is to say that the validity of any philosophical position is tested against its ability to solve current problem. If a thing works in practice, them it is valuable, desirable, and should be upheld. The implication is that nothing is absolutely good; everything is subject to change as situation demands. “Both George Sanders Peirce and William James are often credited to have described pragmatism in part through the biblical allusion. “By their fruits you shall know them”. Hence pragmatism is also known as Experimentalism or consequentialism.

It should be noted here that the capacity of an action or theory to solve the problem of an individual does not qualify that action or theory as truth. It must transcend the needs of an individual to the overall wellbeing of the community. In other words, an action could be satisfactory to an individual but not for the state, such action is morally evil even though it works for the individual. Another characteristic of pragmatism is that it does not make any extramental reference to any authority outside the activity that test for sustainability of any philosophical position. For example in America today, abortion is legally upheld because it serves the individual and helps the state in the management of population size. In this sense, it is “ok” by their law. But should reference be made to absolute moral norm abortion would be found wanting and unacceptable.

It is, thus called Experimentalism because pragmatists believe in experiment as the only criterion of truth. To them truth, reality, goodness and evil are all relative terms. These concepts are not predetermined and absolute. They are proved by man’s own experiences, Pragmatists also hold that whatever was true yesterday; need not be the same today.

Pragmatism is called Consequentialism because any human activity is evaluated in terms of its consequences or results. Change is the basic factor of pragmatism. No truth is absolute and permanent. It is always changing from time to time and from place to place. Pragmatists do not believe in fixed, eternal and absolute values of life to be followed in all times, places and circumstances. To them, only those ideals and values are true which result in some utility to mankind in a certain set of times.

The central positions of Pragmatism are schematized as follows:

1. Faith in the present and future.

2. Change is the only real thing. Everything else is provisional in the sense that the usefulness of any theory is sustained as long as it serves the purpose. Truth is formed by its result.

3. Values are relative. There is no such thing as ultimate value.

4. Critical intelligence is of great importance. Knowledge obtained at any point in time is never an end in itself but a means to an end. That is the main idea behind Dewean Pragmatism as Philosophy Instrumentalism.

5. Problems as the motives of truth.

Educational Implications of Pragmatism

Singh (2007) states that pragmatism is closely related to modern education. It believes in change in education and opposes traditional education. Only gaining of knowledge for the sake of knowledge is not the real aim of education.

This philosophy focuses on mental, religious and aesthetic modes of human activity. Through activities, human being creates their own ideals and values. Aspects of education should be suitable to human good and human growth. According to pragmatists, educational process should promote human welfare. Only flexible educational institutions can remain alive, active and satisfy the changing needs of the society and provide real experiences through activities.
3. Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.

A profit-maximizing entity will command additional units of labor according to the marginal decision rule: If the extra output that is produced by hiring one more unit of labor adds more to total revenue than it adds to the total cost, the firm will increase profit by increasing its use of labor. It will continue to hire more and more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor. This relationship is also called the marginal product of labor (MPL) in the economics community.

Other Considerations in Demand for Labor
According to the law of diminishing marginal returns, by definition, in most sectors, eventually the MPL will decrease. Based on this law: as units of one input are added (with all other inputs held constant) a point will be reached where the resulting additions to output will begin to decrease; that is marginal product will decline.

Another consideration is the marginal revenue product of labor (MRPL), which is the change in revenue that results from employing an additional unit of labor, holding all other inputs constant. This can be used to determine the optimal number of workers to employ at a given market wage rate. According to economic theory, profit-maximizing firms will hire workers up to the point where the marginal revenue product is equal to the wage rate because it is not efficient for a firm to pay its workers more than it will earn in revenues from their labor.

1. Elementary Theory of utility
Utility theory bases its beliefs upon individuals’ preferences. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences. Each individual will show different preferences, which appear to be hard-wired within each individual. We can thus state that individuals’ preferences are intrinsic. Any theory, which proposes to capture preferences, is, by necessity, abstraction based on certain assumptions. Utility theory is a positive theory that seeks to explain the individuals’ observed behavior and choices.The distinction between normative and positive aspects of a theory is very important in the discipline of economics. Some people argue that economic theories should be normative, which means they should be prescriptive and tell people what to do. Others argue, often successfully, that economic theories are designed to be explanations of observed behavior of agents in the market, hence positive in that sense. This contrasts with a normative theory, one that dictates that people should behave in the manner prescribed by it. Instead, it is only since the theory itself is positive, after observing the choices that individuals make, we can draw inferences about their preferences.
2.The Two schools if thoughts are
1. Cardinal school of thought: The cardinal utility analysis or the marginal approach to utility states that utility or the satisfaction derived from the consumption of a commodity or service is measurable and can be expressed in quantitative terms. This approach or method of utility analysis is also known as marginal analysis or neoclassical approach because it was developed and explained by neoclassical economists.
The British social scientist Jeremy Bentham (1748-1832) had employed the concept of cardinal measurement for the first time in his attempt to develop a rational system of civil and criminal law. According to George J. Stigler, Bentham in his book ‘Introduction to the Principles of Morals and Legislation (1789), suggested the measurement of quantities of ‘pleasure’ and ‘pain’ to make a more rational system of civil and criminal law. In this article, we will discuss the concept of the cardinal utility analysis, its basic concepts, and terminologies, and its major assumptions (cardinal analysis and its assumptions).
The German economist Hermann Heinrich Gossen (1854), English economist William Stanley Jevons (1871), and French mathematical economist Leon Walras (1874) made the concept of cardinally measurable utility theory generally accepted in economic analysis. They believed utility is measurable and additive so that ‘utils’ (units of utility) obtained from one good are not affected by the rate of consumption of other goods. It means that they believed the utility derived from the consumption of a product is independent of the consumption of other products.
The theory of cardinal utility was made more advanced by neoclassical economists (Alfred Marshall, A.C. Pigou, etc.) With their marginal revolution of the 1870s. Neoclassical economists enlarged the utility theory with their assumption of measurability. Their units of measurement are random; they are ‘utils’. For example, they believed in the measurement of utility like if a consumer consumes 3 units of orange, he would say that he got 10 utils from the first unit, 8 utils from the second unit, and 6 utils from the third unit. With the passes of time and tackling so many problems relating to practical life the cardinal utility theory had faced so many criticisms and as a result some alternative theories like ordinal utility analysis or Hicks-Allen’s indifference curve analysis, Samuelson’s revealed preference theory, and Hick’s logical weal ordering theory have been advanced. The issues and problems associated with the cardinal approach have shifted the microeconomic theories from cardinal to ordinal utility or ranked preference.
Basic Concepts and Terminologies
The basic concepts and terminologies developed by cardinal utility analysis are briefly explained as below;
Concept of Total Utility
It is the whole satisfaction that an individual obtains by consuming a specified quantity of a commodity per unit of time. According to Richard G. Lipsey and K. Alec Chrystal, ‘Total utility refers to the total satisfaction derived from all the units of that product consumed’.in the cardinal approach of utility, we can write the total utility (TU) as;
TU= U1(X1) +U2(X2) +…. +Un (Xn)
Where, Ui (i=1, 2… n) is the utility derived from unit ‘i’ of good X.

Putting alternatively, if we add the utilities obtained all the units of a commodity during the given time we get the value of total utility (TU). Thus the mathematical formula to measure total utility can also be expressed as;

TU= MU1+MU2+MU3+……..+MUn
Where TU is total utility; MU1+MU2+MU3+……..+MUn is a marginal utility from 1 to n units of a given commodity. Therefore, total utility is the function of the quantity consumed by a consumer.

Concept of Marginal Utility
It can be defined as the change in total utility concerning a change in per unit consumption of a commodity at a given time. According to economists Richard G. Lipsey and K. Alec Chrystal, ‘Marginal utility refers to the change in satisfaction resulting from consuming one unit more or one unit less of a product’. Similarly, economists P.A. Samuelson and W.D. Nordhaus sate, ‘The expression ‘marginal’ is a key term in economics and always means ‘additional’ or ‘extra’. Marginal utility denotes the additional utility you get from the consumption of an additional unit of a commodity.
For instance, consider our example of total utility, the total utility from the consumption of the first four units is 22 utils and from all five units is 25 utils; so the marginal utility of the fifth unit is 3 (=25-22) utils. The marginal utility of the fifth unit of the commodity consumed is the addition to the total utility provided by consuming that extra unit of commodity. Thus, marginal utility is a change in total utility as a result of the change in the unit of a commodity consumed. Mathematically, marginal utility is the slope of the total utility curve. It can be expressed
MUn= ΔTU/ΔQ or, MU= dTU/dQ
Where ΔTU=change in total utility; and ΔQ= change in quantity consumed
Donald Stevenson Watson and Malcolm Getz express that the marginal utility (MU) of any amount ‘j’ of a product is the total utility (TU) of that product minus the TU of one fewer (j-1) units. Thus,
MUj=TUj-TUj-1

Assumptions of Cardinal Utility Analysis
Cardinal utility analysis of demand relies on certain important assumptions. The fact is that the cardinal utility analysis is being criticized due to its unrealistic assumptions, so we need to know the basic assumptions of cardinal utility analysis. The following are those major assumptions on which the whole utility analysis rests.

Rationality: All the consumers are rational in the sense that they attempt to maximize their utilities from their given money income. They obtain all the relevant information needed to maximize their satisfaction.

Cardinal Measurement of Utility
The system of cardinal utility analysis holds that utility is a measurable and quantifiable entity. Cardinal utility analysis advocates that an individual can state utility or satisfaction he gets from the goods in arithmetic terms. So, an individual can say that he derives utility equals 25 units from the consumption of a unit of Good J, and 35 units from the consumption of Good S. Furthermore the cardinal account of utility assumes that an individual can compare utilities obtained from merchandise in respect of size. That is in the form of how much one level of satisfaction is greater than another.
Marshall believed that marginal utility is quantifiable in terms of money. It means, the amount of money that a person is prepared to pay for a unit of a good rather than go without it, is a measure of utility he derives from that good. Thus, money is the measuring rod of utility, according to Marshall. Some other economists belonging to the cardinal school measure utility in imaginary units called utils. Accordingly, a consumer can say that one orange for example provides him satisfaction equal to5 utils.

Independent Utilities
The cardinal school of utility analysis assumes that the utility derived by consumers by consuming any goods or services is independent of the quantity consumed of other goods and services. Thus, the satisfaction from consumption of any particular good depends only on the quantities of that particular good. For instance, if there are n commodities in the basket with quantities J1, J2, J3,….Jn, then total utility is a function of all goods and expressed as;
U=f (J1, J2, J3… Jn)
According to Anna Koutsoyiannis, total utility is additive as;
U= U1 (J1) +U2 (J2) +…… +Un (Jn)

In the later versions of the cardinal utility analysis, the assumption of additivity was removed. They then assumed that the total utility that a person derives from the whole collection of goods purchased by him is simply the total sum of the separate satisfaction of the goods. Thus, the cardinal method of utility analysis regards utility as an additive.

Constant Marginal Utility of Money
This assumption is entirely related to measuring rod use of money in the analysis of utility. Unit this analysis marginal utility of money should remain constant to use as a measuring rod of utility. The necessary quantity of a standard unit of measurement is that the utility remains constant throughout the analysis. If the marginal utility of money changes the measuring rod for utility becomes unrealistic. Marshall measured marginal utilities derived from any good or service in terms of money. By holding constant marginal utility of money even with the change in the price of the commodity Marshall ignored the income effect of change.

Diminishing Marginal Utility
The cardinal utility analysis assumes that the marginal utility of a commodity diminishes as the consumer purchases larger quantities of it. It means if a consumer consumes the successive units of the commodity one after another, the satisfaction that is derived from the additional units of the commodity goes diminishing.
2. Ordinal school of thought: Ordinal utility theory claims that it is only meaningful to ask which option is better than the other, but it is meaningless to ask how much better it is or how good it is. All of the theory of consumer decision-making under conditions of certainty can be, and typically is, expressed in terms of ordinal utility.
Assumptions of Ordinal Utility Analysis
According to P.A. Samuelson and William D. Nordhaus, ‘In ordinal utility approach consumers need to determine only their preference ranking of bundles of commodities.’ In ordinal utility analysis, an individual is observed to prefer once choice to another. Preference can be ordered from most satisfying to least satisfying. Only the ordering is important; the size of the numerical values is not important except in as much as they establish the order. To understand indifference curves, it is best, to begin with, the assumptions. The indifference curve approach as a tool of the ordinal utility analysis is based on the following assumptions;

i. Rationality of Consumer
This analysis assumes the rational consumers whose objective is to maximize the utility under the budget constraint.
ii. Ordinal Measurement
The utility is measured ordinally by comparing the satisfaction whether higher or lower by consuming different bundles of goods. It is sufficient that the consumer expresses his/her preference for the various bundles of goods commodities. It is not obligatory to undertake that utility is quantitively quantifiable.
iii. Transitivity
According to this assumption, when there are three goods A, B, and C and if the consumer chooses as A > B, B > C, then A > C. It is acknowledged as transitivity in preference.
iv. Consistency
As per this assumption, the consumer remains consistent in choice. If there are two goods A and B then A is preferred over B i.e. A > B. At the same time B cannot be preferred over A. i.e. B A. It is called consistency in choice.
V.Non- satiety
The consumer always prefers moreover less if there is a choice available to him. It means the consumer has not reached to point of saturation in case of any commodity such condition is called non-satiety.
Vi. Diminishing Marginal Rate of Substitution (DMRS)
Under this theory, the marginal rate of substitution between two goods always diminishes so that a consumer can attain the same level of satisfaction. It is given by ΔY/ΔX in the case of two goods X and Y and it tells the rate of substituting commodity X to get one more unit of commodity Y
3. Demand for Labor
Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.
A profit-maximizing entity will command additional units of labor according to the marginal decision rule: If the extra output that is produced by hiring one more unit of labor adds more to total revenue than it adds to the total cost, the firm will increase profit by increasing its use of labor. It will continue to hire more and more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor. This relationship is also called the marginal product of labor (MPL) in the economics community.
According to the law of diminishing marginal returns, by definition, in most sectors, eventually the MPL will decrease. Based on this law: as units of one input are added (with all other inputs held constant) a point will be reached where the resulting additions to output will begin to decrease; that is marginal product will decline.
Another consideration is the marginal revenue product of labor (MRPL), which is the change in revenue that results from employing an additional unit of labor, holding all other inputs constant. This can be used to determine the optimal number of workers to employ at a given market wage rate. According to economic theory, profit-maximizing firms will hire workers up to the point where the marginal revenue product is equal to the wage rate because it is not efficient for a firm to pay its workers more than it will earn in revenues from their labor.
Common Reasons for a Shift in Labor Demand
Changes in the marginal productivity of labor, such as technological advances brought on by computers
Changes in the prices of other factors of production, including shifts in the relative prices of labor and capital stock
Changes in the price of an entity’s output, usually from an entity charging more for their product or service
ii: Pricing of the productive factor “labour”
Determination of Prices means to determine the cost of goods sold and services rendered in the free market. In a free market, the forces of demand and supply determine the prices.The Government does not interfere in the determination of the prices. However, in some cases, the Government may intervene in determining the prices. For example, the Government has fixed the minimum selling price for the wheat.
1] Product Cost
Product cost is one of the most important factors which affect the price. It includes the total of fixed costs, variable costs and semi-variable costs incurred through the production, distribution, and selling of the product. Fixed costs refer to those costs which remain fixed at all the levels of production or sales. For instance, rent, salary, etc. Variable costs attribute to the costs which are directly related to the levels of production or sales. For example, the costs of basic material, apprentice costs, etc. Semi-variable costs take into account those costs which change with the level of activity but not in direct proportion.
2] The Utility and Demand :Habitually, end user demands more units of a product when its price is low and vice versa. On the other hand, when the demand for a product is elastic, little variation in the price may result in large changes in quantity demanded.bWhile, when it is inelastic a change in the prices does not affect the demand significantly. In addition, the buyer is ready to pay up to that point where he perceives utility from the product to be at least equal to the price paid.
3] The extent of Competition in the Market
The next consistent factor affecting the price of manufactured goods is the nature and degree of competition in the market. A firm can fix any price for its product if the degree of competition is low. However, when there is competition in the market, the price is fixed after keeping in mind the price of the substitute goods.
4] Government and Legal Regulations
The firms which have a monopoly in the market, habitually charge a high price for their products. In order to protect the interest of the public, the government intervenes and regulates the prices of the commodities. For this purpose, it declares some products as indispensable products. For example, Life-saving drugs, etc.
5] Pricing Objectives
Another consistent factor, affecting the price of an item for consumption or service is the pricing objectives. Profit Maximization, Obtaining Market Share Leadership, Surviving in a Competitive Market and Attaining Product Quality Leadership are the pricing objectives of an enterprise. By and large, firm charges higher prices to cover high quality and high cost if it’s backed by the above objective.
6] Marketing Methods Used
A range of marketing methods such as circulation system, quality of salesmen, marketing, type of wrapping, patron services, etc. also affects the price of manufactured goods. For instance, an organization will charge sky-scraping revenue if it is using the classy material for wrapping its product.

Name: Onyeocha Blessing Chinyere Matric no. 2021/246563 Department:. Economic. Course code:. Eco 101.
Answers

Utility can be defined as the satisfaction a consumer derived from consuming a commodity or the usefulness and capacity of a commodity to satisfy human wants. Types of utility
(I) Timee utility:. this is when a product is accessible to consumers whenever they need them. ( ii). Place utility: it refers to making goods and services available in location that allow consumer to access the goods and services. (III) Forms utility:. this is the transformation of goods from one forms to another example flour to bread. Palm kernel to Palm oil and cassava to garrri. Kinds of utility. * Total utility: Is the total amount of satisfaction a consumer derives from consuming a particular goods and services at a given period of time. * Average utility: Is the per unit of consumption at a particular time and in a given period of time. * Marginal utility: Is the extra unit of the given commodity by the consumer. No2a, Cordinal school of thought: This approach emphasizes that utility is measurable,it tells how utility can be expressed in numbers,and how a consumer can express his/her satisfaction. No2b, Ordinal utility can be defined as the satisfaction of user, goods can be ranked inorder of preference but cannot be evaluated numerically. No3a, Demand for Productive factors ( labour market). Factors of production are the input needed for the creation of goods or services, these include labour, capital, land, entrepreneurship.the demand for labour is a derived demand. *Demand for labour means the total number of workers, employee are within and ready to employ or hire at a particular time in a given wage rate. Demand for labour is a derived demand because is not required for it’s own sake but for what labour can produce. No3b, Pricing for production factors ( labour market). Pricing is the process where by a business sets the price at which it will sell it’s products and services. A pricing strategy takes into account segment, ability to pay, Market conditions,competitors action, trade margins and input cost among others. *Labour can be define as any human input to an economic ventures as a factor of production, labour is any work performed by people contributing to a goods and services production.each industry need labour to accomplish it’s specific goals. * Labour market is any institution or arrangements which bring job seekers and employers of labour together within a particular geographical region. *Direct labour cost are the wages paid to employees who work on producing a companys product or services.

Name: EGBO PHILOMENA OLUEBUBECHUKWU
REG. NO 2020/248961
DEPARTMENT: SCIENCE LABORATORY TECHNOLOGY

1.
ELEMENTARY THEORY OF UTILITY
Concept of utility: Utility can be defined as the satisfaction that a consumer derives from consumption of a good or services. Goods and services are derived because of their ability to satisfy human wants.
Theories of utility: a) Cardinal utility theory and b) Ordinal utility theory
a) Cardinalutility theory: this theory states that the satisfaction consumer’s derived by consumption of a good or services can be measured in numerical terms.
b) Ordinal utility theory: this states that utility can be ranked. It is psychological in the sense that a rational consumer would always go for good or services that he or she thinks gives home or her the maximum satisfaction.
Types of utility: i) Total utility ii) Marginal utility
i) Total utility is the total benefits or satisfaction that a person derives from the consumption of good and services.
ii) Marginal utility is the additional satisfaction obtained or derived from consuming one unit of the good per unit time.
UTILITY MAXIMIZATION: This is the attainment of the greatest greatest possible utility from the consumption of a good or services while consumer strive to achieve maximum satisfaction from consumption, they are constrained by two major factors; income and price of the good/commodity.

2.
I) The cardinal school of thought
II) The Ordinal school of thought

I) CARDINAL SCHOOL OF THOUGHT: This approach emphasizes that utility is measurable. That is, after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which range from zero to infinity.
II) ORDINAL SCHOOL OF THOUGHT: This approach asserts that utility cannot be measured in quantitative terms. Rather, the consumer can compare the utility accruing from different commodities (as a combination of them) and rank them in accordance with the satisfaction each commodity (or combination of commodities) gives him. The ordinal utility believes that the satisfaction level cannot be evaluated; however, it can be levelled.

3.
Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.
Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.

NAME: AJANA PATRICK CHIBUZOR
LEVEL: 100L
DEPARTMENT: SOCIOLOGY AND ANTHROPOLOGY
REG NO: 10017358HI
ASSIGNMENT: ECO 101
EMAIL: ajanapatrick66tlfs@gmail.com

1. Briefly discuss the elementary theory of utility.
Utility in economics was first coined by the noted 18th-century Swiss mathematician Daniel Bernoulli. In economics, utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisfaction or benefit derived from consuming a good or service. Economic theories based on rational choice usually assume that consumers will strive to maximize their utility. The economic utility of a good or service is important to understand because it directly influences the demand, and therefore price, of that good or service. In practice, a consumer’s utility is usually impossible to measure or quantify. However, some economists believe that they can indirectly estimate what is the utility of an economic good or service by employing various models.

2. Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.
a. Cardinal school of thought: This approach emphasizes that utility is measurable. That is, after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which range from zero to infinity. ASSUMPTIONS OF CARDINAL APPROACH.
i. Utility is measurable
ii. The consumer is rational
iii. There is diminishing marginal utility
iv. Total utility (TU) depends on the quantity consumed.
v. Money income of the consumer is held constant.
b. Ordinal school of thought: The ordinal utility approach is a school of thought that believes that utility cannot be measured quantitatively, that is, utility is not additive rather it could only be ranked according to preference. The consumer must be able to determine the order of preference when faced with different bundles of goods by ranking the various ‘baskets of goods’ according to the satisfaction that each bundle gives. For instance, if a consumer derives 3 utils from the consumption of one unit of commodity X and 12 utils from the consumption of commodity
Y, this means that the consumer derives more satisfaction from consuming commodity Y than from commodity X. Though to the cardinals, the consumer derives four times more utility from one unit of Y than from X. The ordinal utility theory explains consumer behaviour by the use of indifference curve.
4.1 Assumptions of Ordinal Utility Approach
(i) Rationality: – The consumer is assumed to be rational meaning that he aims at maximizing total utility given his limited income and the prices of goods and services.
(ii) Utility is Ordinal: – According to this assumption, utility is assumed not to be measurable but can only be ranked according to the order of preference for different kinds of goods.
(iii) Transitivity and Consistency of Choice: – By transitivity of choice, it means that if a consumer prefers bundle A to B and bundle B to C, then invariably, the consumer must prefer bundle A to C. Symbolically, it is written as:
If A > B and B > C; then A > C.
By consistency of choice, it is assumed that the consumer is consistent in his choice making. If two bundles A and B are available to the consumer, if the consumer prefers bundle A to B in one period, he cannot choose bundle B over A nor treat them as equal. Symbolically:
If A > B, then B > A and A ≠ B
(iv) Diminishing Marginal Rate of Substitution (MRS):- MRS is the rate at which the consumer can exchange between two goods and still be at the same level of satisfaction. This assumption is based on the fact that the preferences are ranked in terms of indifference curves which are assumed to be convex to the origin.
(v) The Total Utility of the consumer depends on the quantities of the commodities consumed. That is, the total utility is the addition of the different utilities. u = f(q1, q2 —– qn)
(vi) Non Satiation: – it is assumed that the consumer would always prefer a larger bundle of goods to a smaller bundle of the same good. He is never over supplied with goods within the normal range of consumption.

3. Explain the demand for and pricing of productive factors emphasizing on the labour market.

The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff.

1. Utility theory in economics pertains to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness. Utility theory is based on the fact that satisfaction which consumers derived from consumption of goods and services can be measure quantitative.

2.Cardinal Utility. To help with this quantitative measurement of satisfaction, economists assume a unit known as a “util” to represent the amount of psychological satisfaction a specific good or service generates for a subset of people in various situations.

The concept of a measurable util makes it possible to treat economic theory and relationships using mathematical symbols and calculations.

However, it separates the theory of economic utility from actual observation and experience, since “utils” cannot actually be observed, measured, or compared between different economic goods or between individuals.

Total Utility: Total Utility
If utility in economics is cardinal and measurable, the total utility (TU) is defined as the sum of the satisfaction that a person can receive from the consumption of all units of a specific product or service.

Marginal Utility: Marginal Utility
Marginal utility (MU) is defined as the additional (cardinal) utility gained from the consumption of one additional unit of a good or service or the additional (ordinal) use that a person has for an additional unit.

Ordinary Utility: Ordinal Utility
Early economists of the Spanish Scholastic tradition of the 1300s and 1400s described the economic value of goods as deriving directly from this property of usefulness and based their theories on prices and monetary exchanges.

3. The law of supply and demand combines two fundamental economic principles describing how changes in the price of a resource, commodity, or product affect its supply and demand.

As the price increases, supply rises while demand declines. Conversely, as the price drops supply constricts while demand grows

Question 1.
Discuss Utility in Economics
What does utility mean in economics? Utility theory in economics pertains to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness.

The premise was initially theorized by Swiss mathematician, Daniel Bernoulli, in the 18th century. Bernoulli founded the idea with regard to the differing values of things. Early economists of the Spanish Scholastic tradition of the 1300s and 1400s described the economic value of goods as deriving directly from this property of usefulness and based their theories on prices and monetary exchanges.
This conception of utility was not quantified, but a qualitative property of an economic good.
Later economists, particularly those of the Austrian School, developed this idea into an ordinal theory of utility, or the idea that individuals could order or rank the usefulness of various discrete units of economic goods.

With respect to theory, the utility of an item tends to be closely correlated to its price. An item such as gold, which is very useful and thus has great utility (combined with its scarcity), is very expensive. Total utility is closely tied to the bare concept of utility. Total utility points to the aggregate amount of usefulness and fruition there is to be gained from the use of a specific good, service, or other item. Furthermore, the abstract measurement of utility is another key concept of the theory. Although it’s hard to calculate the exact utility of something, economists use abstract measurements to capture the usefulness of things.

Additionally, utils can decrease as the number of products or services consumed increases.

The four basic assumptions of utility theory are that a customer can rank any number of given options, more total utility is always better than less, a mix of goods is better than a set of one good, and customers are rational decision makers:
* Ranking Options – An individual can rank any number of options based on their utility and the amount of satisfaction they’ll gain from each
* More Total Utility is Better – For a good, service, or any other item, having more total utility is always better than having less as it points to more gratification found in the good, service, or item
* Variety is Better – To have a diversified set of goods is better than to have a set of only one good. This is due to the increased usefulness found in differing goods compared to a single good
* Rational Consumers – It is generally assumed that individuals are rational decision makers who’ll always make the best choice in light of utility
There are also different types of utility, such as: f
* Form Utility – Worth of the good or service based on the combined resources it took to create the good or service
* Time Utility – The utility that is found in offering a good or service to consumers at the right time
* Place Utility – Refers to offering a good or service in the right place for consumers’ easy accessibility
* Possession Utility – The satisfaction a consumer gains from owning a certain product/good

Cardinal Utility Economics
What is a cardinal utility economics. Cardinal utility is a quantitative approach to measuring utility. It presents the utility of something as a fixed number – it’s an exact measure of utility. An individual can rank goods or services according to their cardinal utility by comparing the utility numbers derived from the goods or services.
Ordinal Utility Economics
What is an ordinal utility economics Ordinal utility is a relative measure of utility. It describes how one can determine the value of a good or service by comparing it to another. This measurement only captures which good or service is better, not how much better it is. Customers might assign value to goods or services according to ordinal utility.
Utility in Economics: Supply and Demand
Utility plays a big role in economics with respect to supply and demand. The law of diminishing marginal utility refers to how the utility gained from a certain good or service decreases as consumption increases. The more sodas you drink the less satisfaction you gain from drinking another soda.
The more an individual consumes, the less the need.
Economic utility can be estimated by observing a consumer’s choice between similar products. However, measuring utility becomes challenging as more variables or differences are present between the choices.

Question 2.
The different views of utility according to the two schools of thoughts
Plato
In Plato’s Republics and in his other writings we see a development of idealism.  According to him, every object of our experience is nothing but shadow.  That is saying that it is not in a pure state of reality.  Whatever we perceive is merely a poor copy of the reality that exists in another world which he designates as the world of Forms or Ideas.  Thus Plato’s Idealism talks of two worlds: the world of shadows and the world of Ideas.  The latter is replete with absolute perfection, real, unchangeable, universal and eternal realities whereas the former is the world of imperfect copies of things residing in the real world of ideas.  The implication is that every material thing must have its true copy in the world of ideas.  Idealist would say that even the pen you are having now is only an imperfect copy or a shadow of the ideal pen in the world Ideas.  Though there may ne various strands of idealism, the basic tenet is the emphasis that existence is explained in terms of the mind and its function.

To put it more correctly again, the central thesis of idealism is that true knowledge can be derived from reason alone since it is only the faculty of reason that can grasp or extract from material things their spiritual forms or essences. 

Educational Implication of Idealism
1.    For Plato, Education simply means stimulation of the mind to recall that which it already knows before its being in the world.  He taught that the soul I born with innate knowledge which it lost with contact with the material world (human body).  Thus the concept of school and education is to create an enabling environment where students are encouraged to recall and embrace the concept of the Good and the universal truth that already exist in their soul which has been forgotten.  A
2.    Idealism prefers the world of the spiritual to the world of material things.  Thus, in education, effort is made to create an enabling environment for the orientation of the youngster towards spiritual things or toward ideas.
3.    As a result of the basic tenet of Idealism, educational curriculum is made of humanities (languages, literature, philosophy, religion, etc) and social studies.  These subject are idea-based.  Thus they are to awaken in students the basic ideas of the universe. 

Realism
Realism as a philosophy is traceable to Aristotle, the famous student of Plato, (384-322 BC).  He is acclaimed to be the father of realism just as Plato is believed to be the propounder of idealistic tradition in Western Philosophy.
The contention of Realism is that objects of our sensual perceptions are real in themselves, whether the mind perceives it or know it or not.  The basic tenet of realism is that reality and knowledge of things can be acquires independent of the mind that perceives them.  In other words reality is extramentasl and not intramental, i.e. it exists outside the mind and not within the mind as ideas.  The implication of the realist epistemology is that everyday experience is true knowledge.  “Our dependable knowledge if external reality is possible.  Physical reality asserts, as fact, that the actual sticks, stones and trees of the universe exist whether or not there is a human mind to perceive them”.  Ozmon & Craver (1995).  “The realist prioritizes a worl of ‘things; as opposed to a world of idea Jacobsen, (1842-1910).
Some of the proponents of Realism are Baruch Spinoza (1632-1677), John Locke (1632-1704), American Philosopher-Psychologist, William James, (1842-1910), etc.
Realism upholds that the view that matter is real and not shadows or “copies” of the real which exist in the spiritual/immaterial world.

Realism is like an umbrella term that covers many other philosophies which can be said to be sub-schools of realism.  These sub-schools believe that reality is perceptible, concrete and outside the mind.  Thus we have the following ‘Realisms’.
1.    Aristotelian Realism
2.    Scholastic Realism
3.    Natural or Scientific Realism
Aristotelian Realism:  This is also known as classical realism because it is the premier realism of western culture.  As the name suggests, it is an intellectual product of Aristotle.  He was a student of Plato, but disagreed with his master on what is the nature of human knowledge.  Do we actually perceive things the way they are, or do we perceive them as they appear to us?  That is to ask if the concrete data of our experiences are real or imaginary?  That is why he wrote on almost all the fields of human knowledge: poetry, rhetoric, ethics, politics, meteorology, embryology, physics, mathematics, metaphysics, anatomy, physiology, logic, dreams and so forth.
“Aristotle viewed reality as a uniting of both actuality (form) and potentiality (matter).  Both must be united in order for something to be real or to truly exist”, and that is the principle of his Aristotelian Hylemorphism.  All things are made of matter. 
Aristotle described the relationship between form and matter with the Four Causes:
* Material cause – the matter from which something is made;
* Formal cause – the design that shapes the materials object;
* Efficient cause – the agent that produces the object; and
* Final cause – the direction toward which the object is tending.
Through these different forms, Aristotle demonstrated that matter was constantly in a process of change.  He believed that God, the Ultimate Reality held all creation together.  Organization was very important in Aristotle’s philosophy. 
Furthermore, realism unlike idealism does not talk about dual world of matter and form in order to explain human knowledge.  For realists, there is only “a world” of reality.
Educational Implications of Realism
1.    Religious realists do not limit knowledge to the phenomenal world alone, but hold that knowledge acquired through the senses is real; rational knowledge does not form the entire domain of reality.  There is a being responsible for their existence.  The cosmos are real, and they point to the existence of a higher Being.  Furthermore, the study of God reveals that man always depends on God for his perfection and self-fulfillment. Therefore, education must recognize and incorporate this fact. 
2.    The scientific realism sees the environment and the training of the senses for perception as against empty memorization of abstract things.    The child is given enormous freedom to discover knowledge and is given freedom to think through situations rather than accepting authority as source of human knowledge.  One major criterion for knowledge here is the inductive method of observation, experimentation, formulation of hypothesis and laws which eventually form what is known today as scientific knowledge.    Education is better dome God-free.

Pragmatism
Pragmatism is generally viewed as American philosophy.  It emanated in the later part of the nineteenth century.  The proponents of this philosophical tradition are George Sanders Pierce (1839-1914), William James (1842-1910) and John Dewey (1839-1914) Pragmatism comes from the Greek word pragma meaning work. Pragmatists hold that activity or experiment is done first, and then on the basis of the result, principles and ideas derived. That is to say that the validity of any philosophical position is tested against its ability to solve current problem.  If a thing works in practice, them it is valuable, desirable, and should be upheld.  The implication is that nothing is absolutely good; everything is subject to change as situation demands.  “Both George Sanders Peirce and William James are often credited to have described pragmatism in part through the biblical allusion.  “By their fruits you shall know them”.  Hence pragmatism is also known as Experimentalism or consequentialism.
Another characteristic of pragmatism is that it does not make any extramental reference to any authority outside the activity that test for sustainability of any philosophical position.  For example in America today, abortion is legally upheld because it serves the individual and helps the state in the management of population size.  In this sense, it is “ok” by their law. 
It is, thus called Experimentalism because pragmatists believe in experiment as the only criterion of truth.  To them truth, reality, goodness and evil are all relative terms. 
Pragmatism is called Consequentialism because any human activity is evaluated in terms of its consequences or results.  Change is the basic factor of pragmatism.  No truth is absolute and permanent.  It is always changing from time to time and from place to place.  Pragmatists do not believe in fixed, eternal and absolute values of life to be followed in all times, places and circumstances.  To them, only those ideals and values are true which result in some utility to mankind in a certain set of times.

The central positions of Pragmatism are schematized as follows:
1.     Faith in the present and future.
2.     Change is the only real thing.  Everything else is provisional in the sense that the usefulness of any theory is sustained as long as it serves the purpose.  Truth is formed by its result.
3.     Values are relative.  There is no such thing as ultimate value.
4.     Critical intelligence is of great importance.  Knowledge obtained at any point in time is never an end in itself but a means to an end. 
5.     Problems as the motives of truth.
Educational Implications of Pragmatism
This philosophy focuses on mental, religious and aesthetic modes of human activity.  Through activities, human being creates their own ideals and values.  Aspects of education should be suitable to human good and human growth.  According to pragmatists, educational process should promote human welfare.  Only flexible educational institutions can remain alive, active and satisfy the changing needs of the society and provide real experiences through activities.

Question 3.
The demand for and pricing of productive factors emphasizing on the labour market.
The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.

Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.

Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.

A profit-maximizing entity will command additional units of labor according to the marginal decision rule: If the extra output that is produced by hiring one more unit of labor adds more to total revenue than it adds to the total cost, the firm will increase profit by increasing its use of labor. It will continue to hire more and more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor. This relationship is also called the marginal product of labor (MPL) in the economics community.

Other Considerations in Demand for Labor
According to the law of diminishing marginal returns, by definition, in most sectors, eventually the MPL will decrease. Based on this law: as units of one input are added (with all other inputs held constant) a point will be reached where the resulting additions to output will begin to decrease; that is marginal product will decline.

Common Reasons for a Shift in Labor Demand
* Changes in the marginal productivity of labor, such as technological advances brought on by computers
* Changes in the prices of other factors of production, including shifts in the relative prices of labor and capital stock
* Changes in the price of an entity’s output, usually from an entity charging more for their product or service

Name: EDEH BLESSING OLUCHUKWU
Department:Nursing science
Reg number: 2019/244658
Course :Eco 101
Date: 13/03/2023
Topic:Utility

ASSIGNMENT
1: Briefly discuss the elementary theory of utility.
Utility refers to want satisfying power of a commodity. It is the satisfaction, actual or expected, derived from the consumption of a commodity. Utility differs from person- to-person, place-to-place and time-to-time. In the words of Prof. Hobson, “Utility is the ability of a good to satisfy a want”.
Still, the concept of utility is very useful in explaining and understanding the behaviour of consumer.

Total Utility (TU):
Total utility refers to the total satisfaction obtained from the consumption of all possible units of a commodity. It measures the total satisfaction obtained from consumption of all the units of that good. For example, if the 1st ice-cream gives you a satisfaction of 20 utils and 2nd one gives 16 utils, then TU from 2 ice-creams is 20 + 16 = 36 utils. If the 3rd ice-cream generates satisfaction of 10 utils, then TU from 3 ice-creams will be 20+ 16 + 10 = 46 utils.

TU can be calculated as:

ADVERTISEMENTS:

TUn = U1 + U2 + U3 +……………………. + Un

Where:

TUn = Total utility from n units of a given commodity

U1, U2, U3,……………. Un = Utility from the 1st, 2nd, 3rd nth unit.

2: Mention and discuss the different views of utility according to the two schools of thought which you have been taught.

Many theories describe the level of satisfaction. However, cardinal utility and ordinal utility are the two predominant school of thought of utility. The cardinal utility believes in measuring the satisfaction level in utils and the ordinal utility believes that the satisfaction level cannot be evaluated; however, it can be levelled.
The different views of the two school
Of thought include

A. Definition

Cardinal Utility: It explains that the satisfaction level after consuming any goods or services can be scaled in terms of countable numbers.

​Ordinal Utility: It explains that the satisfaction level after consuming any goods or services cannot be scaled in numbers. However, these things can be arranged in the order of preference.

B.Measurement

Cardinal Utility is measured based on utils.​Ordinal Utility is ranked based on satisfaction

C.Realistic

Cardinal Utility is less practical.​Ordinal Utility is more practical and sensible.
Marginal Utility (MU):
Marginal utility is the additional utility derived from the consumption of one more unit of the given commodity. It is the utility derived from the last unit of a commodity purchased. As per given example, when 3rd ice-cream is consumed, TU increases from 36 utils to 46 utils. The additional 10 utils from the 3rd ice-cream is the MU.

In the words of Chapman, “Marginal utility is addition made to total utility by consuming one more unit of a commodity”.

MU can be calculated as: MUn = TUn – TUn-1

3: Demand for pricing of productive factors emphasizing on the labor market.
Demand for a Factor of Production
The demand for a factor is not a direct demand but it is an indirect or derived demand. The demand for labour, for example, is not demand for labour himself. It is in fact, demand for goods or services which the labour produces. Thus when demand for goods increases, the demand for the factors which produce those goods would also rise. If demand for goods is elastic, the demand for factors would also be elastic. Similarly when demand for goods is inelastic, the factor which produces it will also be inelastic. The demand for any given factor of production also depends upon the availability of other factors which co-operate with this factor in the process of production. Normally the demand for and price of a given factor will be higher if the co-operating factors are available in large. A third rule regarding the demand for a factor is what when more of a factor is employed, its marginal productivity is likely to fall and hence its demand and price are also,
Factor pricing is associated with the prices that an entrepreneur pays to avail the services rendered by the factors of production. For example, an entrepreneur needs to pay wages to labor, rents for availing land, and interests for capital so that he/she can earn maximum profit. These factors of production directly affect the production process of an organization.

In context of an economy, these four factors of production when combined together produce a net aggregate of products, which is termed as national income. Therefore, it is important to determine the prices of these four factors of production. The theory of factor pricing deals with the determination of the share prices of four factors of production, namely land, labor, capital and enterprise.

Name: Ezugwu Jane Chidimma
Reg number:2021/244100
Department: Medical Radiography and Radiological sciences .
Course:Econs 101.
Date: 4/03/2023
Questions.
1: Briefly discuss the elementary theories of utility.
2: Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.
3: Explain the demand for and principles of productive factors emphasizing on the labor market.
Answers.
Question 1:
Utility theory in economics pertains to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness.
Utility theories are as follows:
1) Ordinal utility: When using ordinal utility, consumers assign preferences, but not values, to different products.

For example, someone might say they prefer action films to comedies and comedies to dramas, but they won’t say those action movies are worth 5 points of utility, comedies worth 4, and dramas worth 1.

Some economists argue that ordinal utility is a more realistic way to look at utility theory. Most consumers don’t have a scoring system that they use to make decisions about what to buy. They simply know their preferences and make decisions based on these feelings.
2: Cardinal utility: Cardinal utility assumes that people can assign specific values to products and use those values to make a decision.

For example, a consumer can determine that they receive precisely 20 points of utility from a ticket to a baseball game and 30 points of satisfaction from seats at a hockey game. Thus, the consumer always prefers hockey tickets to baseball tickets, assuming comparable prices.

Cardinal utility is part of rational choice theory, which argues that people work to achieve utility maximization. Cardinal utility is also crucial for the efficient allocation of goods and welfare economics. An economy reaches allocative efficiency when marginal cost (the cost of each additional good) and marginal utility (the value of each additional good) are equal.
3: Total utility: Total utility is the complete level of satisfaction or value that a person receives from consuming a specific product. This contrasts with marginal utility, which is the value that someone gets from using an additional unit of a product.
Question 2:
1: Form Utility

Form utility refers to how much value a consumer receives from a product or service in a way that they actually need. Form utility is, therefore, the incorporation of customer needs and wants into the features and benefits of the products being offered by the company.Form utility may include offering consumers lower prices, more convenience, or a wider selection of products. The goal of these efforts is to increase and maximize the perceived value of the products.
2: Time Utility

This type of utility occurs when a company provides goods and services when consumers demand or need them. Companies analyze how to create or maximize the time utility of their products and adjust their production process, logistical planning of manufacturing and delivery. So when demand increases, the company should respond by producing and delivering more of the product to the market. Failure to factor time utility into the equation can lead to a drop in the customer base, which can result in a loss of revenue.
3:Place utility:
Refers to making goods or services available in locations that allow consumers to easily access products and services.

While most people typically think of place utility as a physical or brick-mortar location, such as a retail store or shopping mall, the digital age helps broaden the definition of availability. For instance, companies can maximize place utility through their website. Those with effective search engine optimization strategies can improve their place utility.
4: Possession Utility

Possession utility is the amount of usefulness or perceived value a consumer derives from owning a specific product and being able to use it as soon as possible. The basic premise behind this utility is that consumers should be able to use a specific good or service as soon as they’re able to purchase or obtain it. For instance, someone who purchases the latest iPhone won’t get much utility for the product if Apple has it on backorder and can’t manufacture and ship it to the consumer in a timely fashion.
However, cardinal utility and ordinal utility are the two predominant schools of thought of utility. The cardinal utility believes in measuring the satisfaction level in utilities and the ordinal utility believes that the satisfaction level cannot be evaluated; however, it can be levelled.
Question 3: When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.
Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.
A profit-maximizing entity will command additional units of labor according to the marginal decision rule: If the extra output that is produced by hiring one more unit of labor adds more to total revenue than it adds to the total cost, the firm will increase profit by increasing its use of labor. It will continue to hire more and more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor. This relationship is also called the marginal product of labor (MPL) in the economics community.
Other Considerations in Demand for Labor

According to the law of diminishing Marginal returns(MR), by definition, in most sectors, eventually the MPL will decrease. Based on this law: as units of one input are added (with all other inputs held constant) a point will be reached where the resulting additions to output will begin to decrease; that is marginal product will decline.

Another consideration is the Marginal revenue product of labour (MRPL), which is the change in revenue that results from employing an additional unit of labor, holding all other inputs constant. This can be used to determine the optimal number of workers to employ at a given market wage rate. According to economic theory, profit-maximizing firms will hire workers up to the point where the marginal revenue product is equal to the wage rate because it is not efficient for a firm to pay its workers more than it will earn in revenues from their labor.

NAME : EZEH EKENEDILICHUKWU DAVID
REG.NO : 2019/250525
DEPARTMENT : NURSING SCIENCES
E-MAIL : ekeneezeh6@gmail.com

1) Briefly discuss the elementary theory of utility.
Utility can be defined as the satisfaction derived from buying a good or service at a particular time. The economic utility of a good or service directly influences demand and therefore affects also the price of that good or service
Utility theory is based on the fact that “satisfaction which consumers derive from consumption of goods and services can be measure quantitatively”.

2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.

Customers are the ultimate user of all goods and services and the producer’s main aim is to satisfy his customer’s needs. However, the level of satisfaction differs from individual to individual due to various factors. The measurement of this utility leads us to the two major schools of thought – Cardinal Utility and Ordinal Utility.
The Cardinal Utility measures the satisfaction level in utils and the ordinal utility believes that the satisfaction level cannot be measured; however, it can be leveled.
Cardinal Utility explains that the satisfaction level after consuming any goods or services can be measured in terms of countable numbers. This theory was applied by Prof. Marshall. Utility is measured based on utils. A typical example is Bread gives Ade 60 utils of satisfaction, whereas pizza gives him only 40 utils.
Ordinal Utility explains that the satisfaction level after consuming any goods or services cannot be measured in numbers. However, these things can be arranged in the order of preference. This theory was applied by Prof. J R Hicks and it is more practical than the Cardinal Utility. Utility is ranked based on satisfaction. A typical example of Ordinal utility is Ade gets more satisfaction from bread as compared to pizza.

3) Explain the demand for and pricing of productive factors emphasizing on the labour market.

Factors of production are the inputs needed for the creation of a good or service. These include labor, entrepreneurship, and capital.

The demand for a factor of production is derived from the demand for the goods and services it is used to produce. It is the value to a firm of hiring one more unit of a factor of production, which equals price of a unit of output multiplied by the marginal product of the factor of production

In economics, a factor price is the unit cost of using a factor of production.

Some market factors that affect Price include Costs and Expenses, supply and Demand, consumer perceptions and Competition.
Factors that affect the determination of the price of a product or a service includes Cost of Product and Demand for the Product.

1 Brefily discuss the elementary theory of utility
positive, after observing the choices that individuals make, we can draw inferences about their preferences. When we place certain restrictions on those preferences, we can represent them analytically using a utility function—a mathematical formulation that ranks the preferences of the individual in terms of satisfaction different consumption bundles provide. Thus, under the assumptions of utility theory, we can assume that people behaved as if they had a utility function and acted according to it. Therefore, the fact that a person does not know his/her utility function, or even denies its existence, does not contradict the theory. Economists have used experiments to decipher individuals’ utility functions and the behavior that underlies individuals’ utility.
2 Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.
The 2 school of thought include
*Cardinal school of thought
*Ordinal school of thought
CARDINAL SCHOOL OF THOUGHT
They believed that utility can be measured using numbers ranging from zero to infinity.they are some basic assumption which includes
1.Utility is measurable
2.consumers are rational
3.money income is constant
ORDINAL SCHOOL OF THOUGHT
What is an Ordinal Utility?
ordinal utility states that the satisfaction gets after consuming a good or service cannot be scaled in numbers, whereas, these things can be arranged in the order of preference.They believed that utility can be ranked but not measured
3 explain the demand and pricing of productive factors emphasizing on labour market
What is Demand for Labor
When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.The demand for any factor of production, such as labor, physical capital or land is a derived demand because it arises not from the intrinsic utility provided by the factor but because of the value placed on the production it produces by consumers.

Name: Ayogu Mercy Chikodili
Faculty: Social Science
Dept: Public administration and local government
Reg.No: 2021/245854

Answer
1. Utility can be defined as the fulfilment or satisfaction a consumer derives from the consumption of a good(s) or service(s).Theory of utility is a concept in economics explains how individuals make decisions based on satisfaction they derive from consumption of goods and services.
The theory of utility assumes that individuals are rational and seek to maximize their utility and also to make known that individuals have a limited budget and must make choices about how to allocate their resources in order to obtain the most satisfaction.
The theory of utility has important implications for a variety of economic concepts, including demand theory, consumer behavior and welfare economics.

2a.Cardinal school of thought
2b. Ordinal school of though.

The cardinal school of thought emphasizes that utility is measurable. It argues that after the consumption of a commodity, the consumer can simply evaluate his satisfaction through the use of figures ranging from zero to infinity. One’s satisfaction can be measured in utils.

The Ordinal school of thought emphasizes that the satisfaction of a consumer from the consumption of goods cannot be expressed numerically but can only be ranked or put to order.This approach argues that utility is completely a psychological element and cannot be expressed in numbers.

3.Process of business production makes use of capital and labour to create goods and services.A corporation will require more labour market and recruit more workers if there is high demand for it’s output as also.if there is less.demand for it’s output there will be a reduction in employing labour.

Name: Ayogu Mercy Chikodili
Faculty: Social Science
Dept: Public administration and local government
Reg.No:2021/245854

Answers
1. Utility can be defined as the fulfilment or satisfaction a consumer derives from the consumption of a good(s) or service(s).Theory of utility is a concept in economics explains how individuals make decisions based on satisfaction they derive from consumption of goods and services.
The theory of utility assumes that individuals are rational and seek to maximize their utility and also to make known that individuals have a limited budget and must make choices about how to allocate their resources in order to obtain the most satisfaction.
The theory of utility has important implications for a variety of economic concepts, including demand theory, consumer behavior and welfare economics.

2a.Cardinal school of thought
2b. Ordinal school of though.

The cardinal school of thought emphasizes that utility is measurable. It argues that after the consumption of a commodity, the consumer can simply evaluate his satisfaction through the use of figures ranging from zero to infinity. One’s satisfaction can be measured in utils.

The Ordinal school of thought emphasizes that the satisfaction of a consumer from the consumption of goods cannot be expressed numerically but can only be ranked or put to order.This approach argues that utility is completely a psychological element and cannot be expressed in numbers.

3.Process of business production makes use of capital and labour to create goods and services.A corporation will require more labour market and recruit more workers if there is high demand for it’s output as also.if there is less.demand for it’s output there will be a reduction in employing labour.

Name; Onu faithfulness chinyere
Department: economics
Reg no: 2021/244051
Email: onfaithfulness@gmail.ccom

1)Utility: In Economics, utility is a term used to determine the worth or value of a good or service. More especially, utility is the total satisfaction or benefit derived from consuming a good or service.

2)-Cardinal school of thought.
-Ordinal school of thought.

a)Cardinal school of thought states that utility is measurable. That is, after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which range from zero to infinity.
b)Ordinal school of thought States that utility/satisfaction cannot be measured in exact numbers, that is utility is not additive rather it could only be ranked according to preference.

3) The demand for a factor is not a direct demand but it is an indirect or derived demand. The demand for labour, for example, is not demand for labour himself. It is in fact, demand for goods or services which the labour produces. Thus when demand for goods increases, the demand for the factors which produce those goods would also rise. If demand for goods is elastic, the demand for factors would also be elastic. Similarly when demand for goods is inelastic, the factor which produces it will also be inelastic. The demand for any given factor of production also depends upon the availability of other factors which co-operate with this factor in the process of production.

1)Discuss the elementary theory of utility
Utility theory is based on the fact that satisfaction of which consumer derives from consumption of goods and services can be measured quantitatively.
It bases its beliefs upon individuals’ preferences. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences. Each individual will show different preferences, which appear to be hard-wired within each individual. We can thus state that individuals’ preferences are intrinsic. Any theory, which proposes to capture preferences, is, by necessity, abstraction based on certain assumptions. Utility theory is a positive theory that seeks to explain the individuals’ observed behavior and choices.The distinction between normative and positive aspects of a theory is very important in the discipline of economics. Some people argue that economic theories should be normative, which means they should be prescriptive and tell people what to do. Others argue, often successfully, that economic theories are designed to be explanations of observed behavior of agents in the market, hence positive in that sense.
The utility theory then makes the following assumptions:

1)Completeness: Individuals can rank order all possible bundles. Rank ordering implies that the theory assumes that, no matter how many combinations of consumption bundles are placed in front of the individual, each individual can always rank them in some order based on preferences. This, in turn, means that individuals can somehow compare any bundle with any other bundle and rank them in order of the satisfaction each bundle provides. So in our example, half a week of food and clothing can be compared to one week of food alone, one week of clothing alone, or any such combination.
2)Rationality: This is the most important and controversial assumption that underlies all of utility theory. Under the assumption of rationality, individuals’ preferences avoid any kind of circularity; that is, if bundle A is preferred to B, and bundle B is preferred to C, then A is also preferred to C. Under no circumstances will the individual prefer C to A. You can likely see why this assumption is controversial. It assumes that the innate preferences (rank orderings of bundles of goods) are fixed, regardless of the context and time.
3)More-is-better: Assume an individual prefers consumption of bundle A of goods to bundle B. Then he is offered another bundle, which contains more of everything in bundle A, that is, the new bundle is represented by αA where α = 1. The more-is-better assumption says that individuals prefer αA to A, which in turn is preferred to B, but also A itself. For our example, if one week of food is preferred to one week of clothing, then two weeks of food is a preferred package to one week of food.
4)Mix-is-better: Suppose an individual is indifferent to the choice between one week of clothing alone and one week of food. Thus, either choice by itself is not preferred over the other. The “mix-is-better” assumption about preferences says that a mix of the two, say half-week of food mixed with half-week of clothing, will be preferred to both stand-alone choices. Thus, a glass of milk mixed with Milo (Nestlè’s drink mix), will be preferred to milk or Milo alone. The mix-is-better assumption is called the “convexity” assumption on preferences, that is, preferences are convex.

2)Different views of utility according to the two schools of thoughts
It include the cardinal utility and ordinal utility

*CARDINAL UTILITY:
This approach emphasizes that utility is measurable. That is, after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which range from zero to infinity.For example, a bunch of 20 bananas can be said to have a cardinal utility of 20, whereas a bunch of 10 only has a utility value of 10.

*ORDINAL UTILITY:
Ordinal utility is a relative measure of utility. It describes how one can determine the value of a good or service by comparing it to another. This measurement only captures which good or service is better, not how much better it is. Customers might assign value to goods or services according to ordinal utility. For example, a man asks his friend which one of two local barbershops is better. His friend tells him barber B is better because his skills are more refined. This is a relative measure as one can’t quantitatively measure how much better the one barber cuts hair compared to the other.

3(Demand for and pricing of productive factors emphasizing on the labour market.

When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.

Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.
Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.
The demand for labour shows how many workers the firms are willing and able to hire at a given time and wage rate.

Therefore, demand for labour is a concept that illustrates the amount of labour a firm is willing to employ at a particular wage rate. However, the determination of equilibrium in the labour market will also depend on the supply of labour.

Answer to question 1
Theory of utility according to Alfred Marshall states that the utility of a thing to a person at a time is measured by the extent to which it satisfies his wants.utility theory tries to explain the behavior of individual consumers in an economy it also argues that each person given a list of options can rank those options in a precise order of preference each person has different choices which are set not changing over time.utility theory is based on the fact that satisfaction which derived from consumption of goods and services can be measured quantitatively at a particular time.

Answer to question 2
a. Cardinal school of thought
b. Ordinal school of thought
A. Cardinal school of thought emphasizes that utility is measurable that is after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which range from zero to infinity the assumption are utility is measurable,the consumer is rational.
B. Ordinal school of thought approach to consumers utility states that the utility/satisfaction cannot be measured in exact numbers but can only be ranked or put into order.its also says that utility is completely a psychological element and it cannot be expressed in cardinal numbers it cannot be measured quantitatively.

Answer to question 3
The concept of labour market can be viewed as a factor market factor market provides a way for a firms and employers to find the employees they need demand for labour is a consent that illustrates the amount of labour is firm is willing to employ at a particular wage rate.however the determination of equilibrium in the labour market will also depend on the supply of labour equilibrium in the labour market depend on the wage rate firms are willing to pay any amount of labour willing to provide the necessary work remember the factors of production are he resources used to produce goods and services they include land,labour,capital and technology.

1.utility theory in economics involves the value or worth of a particular good,service or item.
it suggests that goods,services and items can be ranked according to their usefulness.
The premise was first theorized by swiss mathematician,Daniel Bernoulli in 18th century
2.Cardinal utility and ordinal utility_cardinal utility believes in measuring the satisfaction level in utils and the ordinal utility believes that the satisfaction level cannot be evaluated;However,it can be leveled.
3.In the labour market,the law of demand applies that;a higher salary or wage that is,a higher price In the labour market-leads to a decrease in the quantity of lab our demanded by employers,while a lower salary or wage leads to an increase in the quantity of labour demanded.
The law of supply functions in labour markets,too:a higher price for labour leads to a higher quantity of labour applied;a lower price leads to a lower quantity supplied.

Number 1:

Utility is the maximum satisfaction that a consumer derives from consuming a commodity at any particular time. Therefore, consumers react to changes in price and income by allocating their limited resources among competing goods and services with a goal to maximize their satisfaction (utility). It differs from usefulness such that a commodity may be useful to a human being but does not satisfy an individual’s want. Again, it differs from one individual to another and is dependent on time of consumption.

Number 2:

There are two schools of thought with different views on utility. They are:
(a) Cardinal school of thought
(b) Ordinal school of thought

The theory of “Cardinal utility” holds that utility is measurable on the basis of the monetary value of the commodity or through the use of figures ranging from zero to infinity.

There are 5 principal assumptions on the Cardinal school of thought namely:

(i) The consumer is rational. This means that the consumer will consume those commodities which yields the highest utility and then the second to the highest and so on.

(ii) Increase in consumption brings about decrease in marginal utility.

(iii) Utility is additive. That is, utility is derived from the consumption of different commodities which when added up, total utility is realized.

(iv) Utility is measurable

(v) Money income of the consumer is constant. Marginal utility of money remains constant even though the quantity of money with the consumer is diminished by the successive purchases made by him.

On the other hand, “Ordinal utility” school of thought believes that utility cannot be measured. It requires that consumers make a scale of preference by choosing the various commodities that gives one the same level of consumption. This approach makes use of an indifference curve that indicates the levels of satisfaction attained by a consumer from the two commodities.

The assumptions of Ordinal utility include:

(I) Total utility is determined by the quality of goods consumed.

(II) The aim of every consumer is to maximize satisfaction or utility on his income level, the least expenditure, market situation and price of the commodity

(III) The preference for a product is based on the level of satisfaction expected

(IV) The marginal rate of substitution states that increase in the consumption of a commodity will lead to/result to decrease in the consumption of another commodity.

Number 3:

The three most important factors of production are: labour, land and capital. The demand for a factor of production is not a direct demand but an indirect/derived demand. The demand for labour for example is not a demand for labour itself but in fact, demand for goods and services which the labour produces. Therefore, when demand for goods increases,the demand for the factors which produce those goods would also increase. Also, the demand and price of a factor of production also depends upon the market price of the goods for the production for which the factor is used. If the goods are being sold at high prices, the demand for the factors would also be higher.

Now, considering labour for instance,the supply of labour depends upon the size and composition of population, it’s occupational and geographical distribution, efficiency of labour,expected income,etc.

But generally, a higher salary or wage- that is, a higher price in the labour market- leads to a decrease in the quantity of labour demanded by employers, while a lower salary or wage leads to an increase in the quantity of labour demanded. And, a higher price of labour leads to a higher quantity of labour supplied; a lower price leads to a lower quantity supplied. Therefore, when the demand for the goods produced (output) increases, both the output and the profitability increases. As a result, producers demand more labour to ramp up production.

1) In economics, utility theory tries to explain the behavior of individual consumers in an economy. Utility theory argues that each person, given a list of options, can rank those options in a precise order of preference. Each person has different choices which are set, not changing over time.

For example, imagine consumer A consistently prefers hamburgers to hot dogs, while consumer B always wants a hot dog more than a burger.

Utility theory relies on a few assumptions about consumers and their behavior: One assumption is that people can rank any number of options in exact order of preference. The options need not be related, and there is no limit to the number of options that the consumer can rank.

A second assumption is that more total utility is always better. If Bundle A produces 10 units of utility, and Bundle B produces 11 units of utility, the individual will always be better off with Bundle B.

Utility theory also assumes that a mix of goods is better. If a consumer values two items roughly equally, then a combination of the two offers more expected utility. For example, a consumer who considers hot dogs and hamburgers roughly equal would choose to receive one of each over two hotdogs or two hamburgers.

Finally, utility theory relies on rational decision making. If a consumer prefers product X to product Y and product Y to product Z, then there is no time that the decision-maker will prefer product Z to product X. In other words, the individual’s preferences are fixed and don’t change.

Utility theory can explain why consumers behave the way they do and make the purchases they make.

Expected utility theory is a related theory. It states that consumers make decisions based on the satisfaction they can expect to receive from an action, even when outcomes are uncertain.

2)a)Ordinary Utility: When using ordinal utility, consumers assign preferences, but not values, to different products.

For example, someone might say they prefer action films to comedies and comedies to dramas, but they won’t say those action movies are worth 5 points of utility, comedies worth 4, and dramas worth 1.

Some economists argue that ordinal utility is a more realistic way to look at utility theory. Most consumers don’t have a scoring system that they use to make decisions about what to buy. They simply know their preferences and make decisions based on these feelings.

2)b) Cardinal Utility: Cardinal utility assumes that people can assign specific values to products and use those values to make a decision.

For example, a consumer can determine that they receive precisely 20 points of utility from a ticket to a baseball game and 30 points of satisfaction from seats at a hockey game. Thus, the consumer always prefers hockey tickets to baseball tickets, assuming comparable prices.

Cardinal utility is part of rational choice theory, which argues that people work to achieve utility maximization.

One way that economists try to assign utility values to products is by looking at the maximum price a consumer will pay for a product. If someone is willing to pay $50 for a hockey ticket, they may decide that they receive 50 units of utility from it. If they would only pay $30 for a baseball ticket, they only get 30 units of satisfaction from seeing a baseball game.

Cardinal utility is also crucial for the efficient allocation of goods and welfare economics. An economy reaches allocative efficiency when marginal cost (the cost of each additional good) and marginal utility (the value of each additional good) are equal.

3) Factors affecting the demand for labour
Many factors that can affect the demand for labour.

Labour productivity
If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase. This would shift the labour demand curve outwards.

Changes in technology
Changes in technology can cause the demand for labour to increase and decrease depending on the situation.

If technological changes make labour more productive relative to the other factors of production (such as capital), firms would demand an increased amount of workers and substitute the other factors of production with new labour.

For example, the production of computer chips will require a certain amount of skilled software and hardware engineers. Thus, the demand for such workers would increase. This would shift the labour demand curve outwards.
However, with the production and subsequent competition from other firms, we could assume that chip development could become automated. The subsequent result would be a replacement of labour with machines. This would shift the labour demand curve inwards.

Changes in the number of firms
Changes in the number of firms operating in the industry can have an immense effect on the overall labour market. This is because demand for a certain factor can be determined by the number of firms currently utilising that factor.

For example, if the number of restaurants increases in a certain area, the demand for new waiters, waitresses, cooks, and other forms of gastronomy workers will increase. An increase in the number of firms would result in an outward shift in the labour demand curve.
Changes in demand for a product that labour produces
If there is an increase in demand for new vehicles, we would likely see an increase in demand for raw materials used in vehicle production. This would lead to an increase in demand for workers, as firms would need people to manufacture the vehicles. This would shift the labour demand curve outwards.

Profitability of firms
If a firm’s profitability increases, it will be able to hire more workers. This will lead to an increase in the demand for labour. Conversely, a firm that is making no profit and is consistently registering losses will need to layoff workers as it will not be able to pay them anymore. This would subsequently reduce the demand for labour and shift the demand curve of labour inwards.

Onah Chisom Evelyn
Reg.number: 2021/246809
Email : chisomonah343@gmail.com

Question No.(1).
Utility refers to the ability of goods or services to satisfy unlimited human wants. It can also be viewed as satisfaction, pleasure or fulfillment an individual derives from the the consumption of goods and services . Goods are desired because of their ability to satisfy human wants. The concept of utility is used to express consumer’s taste and preferences. The analysis of consumer tastes and preferences is a crucial step in determining how a consumer maximizes satisfaction in spending income. The Utility of a consumer is relatively hard to measure. However, it can be determined indirectly with Consumer behavior theories, which assume that consumer will strive to maximize their utility with the resources available to them.
Thus, when a consumer derives satisfaction from consuming goods or services , it can be said that the goods or services consumed or utilized possesses utility, which is relative to the consumer depending on time, place, form , and possession.

Question No.(2)

The concept of utility can be analyzed basically by two school of thoughts and they are:

(a). The Cardinal school of thought: This school of thought emphasizes that utility is measurable.This means that the quantity of goods or services that satisfies the need of a consumer can be evaluated through the use of figures ragging from zero to infinity.

(2). The ordinal school of thought : This school of thought rejects that utility can be measured in absolute or cardinal terms, and instead, argues that utility can only be ranked or compared in terms of it’s relative value .
According to the ordinal school of thought, consumers make choices based on their preferences and the relative value they assign to different goods and services. This value is subjective and varies from person to person, and from situation to situation. The ordinal school of thought rejects the concept of cardinal utility, which assumes that utility can be measured in absolute terms, and instead, emphasizes the importance of relative comparisons and trade- offs between different goods and services.

Question (3).

Labour in economics refers to the physical and mental effort that is expended by individuals to produce goods and services.

The demand for labour refers to the amount of labour that employers are willing and able to hire at a given wage rate. The demand of labour is influenced by various factors such as the level of economic activity, the productivity of workers, the availability of capital and technology, and the relative costs of labour and other factors of production. One of the main determinants of the demand of labour is the level of economic activity. When the economy is growing, firms tend increase their production and therefore, they may demand more labour to meet the increase demand for goods and services. On the other hand, during economic downturns or recessions, firms may reduce their production, resulting in lower demand for labour.
Another important factor that affects demand the demand of labour is the productivity of Workers. When workers are more productive , they can produce more output per unit of labour , and therefore, firm may be willing to hire more workers at a given wage rate.
In summary the demand for Labour is an important determinant of the wage rate and employment levels in an economy, and it’s influenced by a variety of economic, technological, and social factors

The pricing of labour refers to the determination of Wage or salary that an employer are willing to pay for a specific type of work or service provided by an employee
. The pricing of labour is influenced by various by various factors such as, supply and demand for labour , the skills and the experience of the worker, the level of education or training required for the job. And the prevailing market conditions.
In a competitive labour market, the wage or salary for a particular job is determined by the equilibrium between the supply of labour and the demand of labour. When the supply of labour exceeds the demand, wages tends to fall, and when the demand for labour exceeds the Supply, wages tends to rise.
Other factors that can affect the pricing of labour include government regulations, labour unions, and minimum wage rate laws.
In general, the pricing of labour is a complex process that takes into account various economic, social, and political factors that affect the supply and demand for labour.

Name: Elemuo Blessing
Matric no: 2020/243962
1. The elementary theory of utility is based on the fact that satisfactions which consumers derived from consumption of goods and services can be measure quantitative.
2.i) it is the amount of satisfaction derived from the use of a commodity at a particular time.
ii) it is the mental state that refers to the amount of satisfaction a consumer estimates to have after the consumption of a certain good or commodity in a particular time.
III) it is the amount of benefit one gets from the consumption of a particular good at a particular time and season.
3. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor but if the demand for a firms output decreases the labour will be less, this hiring less staffs.

1. Utility is the maximum satisfaction derived from the consumption if a particular unit of a commodity
There are four types.
i. Place utility. This is the satisfaction derived from the consumption of a hood at a particular place
ii. Time utility. This is the maximum satisfaction derived from the consumption of a good at a particular time
iii.Form utility: This is the maximum satisfaction derived from the consumption of a good for a particular reason
iv. Possession utility: this is the satisfaction derived from owning a good
2. cardinal utility and ordinal utility are the two predominant theories of utility. The cardinal utility believes in measuring the satisfaction level in utils and the ordinal utility believes that the satisfaction level cannot be evaluated; however, it can be levelled.
3. Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time.

Name: Dinneya Chidinma Favour
Department: Social science Education
Unit: Economics Education
Reg No: 2021/241490
Theory of Utility
1. Utility is the total benefits or satisfaction which a person gets from the consumption of goods and services. Goods are desired because of their ability to satisfy human wants.
The concept of utility is used here to express consumer’s tastes and preferences. The Analysis of consumer tastes and preferences is an important step in determining how a consumer maximizes satisfaction in spending Income.
2. There are two school of thoughts: The Cardinal and the Ordinal school of thoughts.
i) The Cardinals: The cardinal school of thought believe that utility can be measured in numbers from Zero to infinity. It deals with one product at a time. They assume the income of consumer remains constant.
ii) The Ordinals: The Ordinals do not believe that utility can be measured with numbers. A consumer can derive more utility from commodity A than from commodity B. And therefore will spend his income on commodity A rather than B.
3. Factors of production are used to produce goods and services. There are three most important factors of production which are land, labour and capital.
The demand for any factor of production is derived demand. A firm cannot make profit unless there is demand for its output. The demand for any factor of production depends on the demand for the output it is used to produce.
The value of marginal product of a variable input is the additional revenue a firm earns by employing one additional unit of that factor of production, ceteris paribus.
Labour markets like other goods markets in the economy are governed by the forces of demand and supply. The supply and demand for labour determine the wage or price paid for labour services. When a firm increases the number of workers, the quantity of goods and services produced rises, The wages of the workers is determined by the profits made by the firm.

NAME: Amuh Tobenna Anthony
REG NO: 2020/242720
DEPT: Nursing Sciences
1. The elementary theory of utility is a fundamental concept in economics that explains how individuals make choices in order to maximize their satisfaction or well-being. According to this theory, individuals make rational decisions based on their preferences and the constraints they face. Utility refers to the satisfaction or happiness that an individual derives from consuming goods and services. The elementary theory of utility assumes that individuals aim to maximize their total utility by allocating their income in a way that provides them with the greatest possible satisfaction. One of the key assumptions of the elementary theory of utility is that individuals have a limited budget or income, which they must use to purchase goods and services. They also have a set of preferences or tastes, which determine the amount of utility they derive from consuming different goods and services.
2. The two schools of thought in economics that have different views on the concept of utility are the cardinal school of thought and the ordinal school of thought. Here are the different views of utility according to these two schools of thought: Cardinal school of thought: The cardinal school of thought assumes that utility can be measured and assigned a numerical value. According to this school, utility is a quantifiable measure of satisfaction or happiness that individuals derive from consuming goods and services. The cardinal school of thought views utility as an objective measure that can be compared across individuals and goods. According to this school, individuals can rank different goods and services based on their utility and make choices that maximize their overall utility. The cardinal school of thought assumes that utility is a linear function of the quantity of a particular good or service consumed. This means that the additional utility or satisfaction an individual derives from consuming an additional unit of a good or service is constant. Ordinal school of thought: The ordinal school of thought challenges the assumptions of the cardinal school and argues that utility cannot be measured or assigned a numerical value. According to this school, utility is a subjective measure of satisfaction or happiness that cannot be compared across individuals or goods. The ordinal school of thought views utility as a ranking of preferences rather than a quantifiable measure. According to this school, individuals can rank different goods and services based on their preferences, but they cannot assign a numerical value to these preferences. The ordinal school of thought assumes that utility is an ordinal function of the quantity of a particular good or service consumed. This means that the additional utility or satisfaction an individual derives from consuming an additional unit of a good or service may not be constant and can vary depending on the individual’s preferences and the context. Overall, the different views of utility according to the cardinal and ordinal schools of thought reflect different assumptions about the nature of utility and its relationship with consumption. While the cardinal school assumes that utility is a measurable and linear function of consumption, the ordinal school argues that utility is a subjective and non-measurable ranking of preferences. The demand for and pricing of productive factors, such as labour, play a crucial role in determining the overall economic activity and welfare of a society. Here’s an explanation of the demand for and pricing of labour: Demand for labour:
3. The demand for labour is the quantity of labour that employers are willing and able to hire at a given wage rate. The demand for labour is derived from the demand for the goods and services that labour helps produce. In other words, firms will hire labour when the marginal product of labour (the additional output produced by an additional unit of labour) exceeds the wage rate. There are several factors that affect the demand for labour, including the level of technology, the price of output, the availability of other factors of production, and the size of the labour force. Changes in any of these factors can shift the demand for labour curve. Pricing of labour: The price of labour is the wage rate that workers receive in exchange for their labour. The wage rate is determined by the interaction of the demand for and supply of labour. When the demand for labour exceeds the supply of labour, the wage rate will increase, and when the supply of labour exceeds the demand for labour, the wage rate will decrease. There are several factors that affect the supply of labour, including population growth, changes in immigration policy, changes in retirement age, and changes in the labour force participation rate. Changes in any of these factors can shift the supply of the labour curve. The pricing of labour is also affected by the degree of competition in the labour market. In a perfectly competitive labour market, employers and workers are price takers, meaning that they have no market power to influence the wage rate. In a non-competitive labour market, such as a monopsony (where there is only one buyer of labour), the employer has market power and can pay a lower wage rate than in a competitive labour market.

NAME: IDIKA DIVINE UDUMA
REG NO.: 2021/244496

1. Utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisfaction or benefit derived from consuming a good or service. Economic theories based on rational choice usually assume that consumers will strive to maximize their utility.The economic utility of a good or service is important to understand because it directly influences the demand, and therefore price, of that good or service. In practice, a consumer’s utility is usually impossible to measure or quantify.

2. Cardinal Utility and Ordinal utility
Cardinal Utility:The cardinal utility states that the level of satisfaction a consumer acquires after consuming any goods and services can be measurable and expressed in quantitative numbers.
Ordinal Utility:The concept of ordinal utility states that the level of satisfaction a consumer obtains after consuming various commodities cannot be measured in numbers but can be arranged in the order of preference.

3.The concept of labour market can be viewed as a ‘factor market.’ Factor markets provide a way for firms and employers to find the employees they need.Therefore, demand for labour is a concept that illustrates the amount of labour a firm is willing to employ at a particular wage rate. However, the determination of equilibrium in the labour market will also depend on the supply of labour. Equilibrium in the labour market depends on the wage rate firms are willing to pay and the amount of labour willing to provide the necessary work.

Name:Oluwatosin Adepoju Eliel
Reg no:11274715EG
Date:Monday 13th March 2023

No 1)
What Is Utility?
In economics, utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisf

Utility, in economics, refers to the usefulness or enjoyment a consumer can get from a service or good.
Although the concept of utility is abstract, it is a useful way to explain how and why consumers make their decisions.

Understanding Utility
The utility definition in economics is derived from the concept of usefulness. An economic good yields utility to the extent to which it’s useful for satisfying a consumer’s want or need.

No 2)
Various schools of thought differ as to how to model economic utility and measure the usefulness of a good or service.

Utility in economics was first coined by the noted 18th-century Swiss mathematician Daniel Bernoulli.

Since then, economic theory has progressed, leading to various types of economic utility.

Ordinal Utility
Early economists of the Spanish Scholastic tradition of the 1300s and 1400s described the economic value of goods as deriving directly from this property of usefulness and based their theories on prices and monetary exchanges.

This conception of utility was not quantified, but a qualitative property of an economic good.

Later economists, particularly those of the Austrian School, developed this idea into an ordinal theory of utility, or the idea that individuals could order or rank the usefulness of various discrete units of economic goods.
Austrian economist Carl Menger, in a discovery known as the marginal revolution, used this type of framework to help him resolve the diamond-water paradox that had vexed many previous economists. Because the first available units of any economic good will be put to the most highly valued uses, and subsequent units go to lower-valued uses, this ordinal theory of utility is useful for explaining the law of diminishing marginal utility and fundamental economic laws of supply and demand.

Cardinal Utility
To Bernoulli and other economists, utility is modeled as a quantifiable or cardinal property of the economic goods that a person consumes.

To help with this quantitative measurement of satisfaction, economists assume a unit known as a “util” to represent the amount of psychological satisfaction a specific good or service generates for a subset of people in various situations.

The concept of a measurable util makes it possible to treat economic theory and relationships using mathematical symbols and calculations.

No 3)
What is Demand for Labor
When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.
Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.

Further Emphasis on the Demand for Labor.

Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.
profit-maximizing entity will command additional units of labor according to the marginal decision rule: If the extra output that is produced by hiring one more unit of labor adds more to total revenue than it adds to the total cost, the firm will increase profit by increasing its use of labor. It will continue to hire more and more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor. This relationship is also called the marginal product of labor (MPL) in the economics community.

What causes a Shift in Labor Demand.

a)Changes in the marginal productivity of labor, such as technological advances brought on by computers.

b)Changes in the prices of other factors of production, including shifts in the relative prices of labor and capital stock.

c)Changes in the price of an entity’s output, usually from an entity charging more for their product or service.

Mozie Chiamaka Marycynthia
2020/242566
Pure and industrial chemistry.

1. Utility is the amount of satisfaction desired from the use of a commodity at a particular time. It is the amount of benefit one gets from the consumption of a particular good at a particular time. The utility of any product is not fixed, it relates to something at a particular time. Therefore utility is used to express consumer’s tastes and preferences and how the consumers desires satisfaction.

2a. According to the cardinal school of thought:
i. Utility is measurable.
ii. Consumer is rational
iii. There is diminishing marginal utility.
iv. Total utility depends on the quantity consumed.
v. Money income of the consumer is held constant.
Explain.
i. Utility is measured: After consuming a given quantity of a commodity, the consumer can evaluate his satisfaction through the use of figures which ranges from zero to infinity.
iii. There is diminishing marginal utility: If a consumer continues consuming successive equal movements in the quantity of a commodity, then the increase in total utility resulting will be smaller i.e satisfaction per additional unit will start falling.
iv. Total utility depends on the quantity consumed: Utility increases as the quantity consumed increases but not at equal rate because the consumers has a point where he won’t be able to consume more of that product.
2b. According to the ordinal school of thought
i. Utility can be measured – Level of satisfaction after consuming any good is not measured with figures rather they can be arranged in the order of preference.
ii. Consistency – A consumer’s choice is consistent i.e if there are two goods A and B, and he chooses commodity A, he cannot choose commodity B at the same time.
iii. Rationality of Consumer – It assumes the rational consumer whose objective to maximize the utility under the budget constraint.
iv. Diminishing marginal rate of substitution – The marginal rate of substitution between two goods always diminishes so that a consumer can attain the same level of satisfation.

3) The firm’s demand for labour depends on the marginal revenue generated from each unit of output and the productivity of each labour unit. Marginal revenue will increase as price of output increases , firms will demand more labour when outputs’ price gets higher. Marginal productivity increase will increase demand for labour . Investment in Capita such as Education, Training etc will increase productivity.

3). A profit-maximizing entity will command additional units of labor according to the marginal decision rule: If the extra output that is produced by hiring one more unit of labor adds more to total revenue than it adds to the total cost, the firm will increase profit by increasing its use of labor. It will continue to hire more and more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor. This relationship is also called the marginal product of labor (MPL) in the economics community.

2). Cardinal utility
b). Ordinal utility
cardinal utility and ordinal utility are the two predominant theories of utility. The cardinal utility believes in measuring the satisfaction level in utils and the ordinal utility believes that the satisfaction level cannot be evaluated; however, it can be levelled.

1). In economics, utility theory tries to explain the behavior of individual consumers in an economy. Utility theory argues that each person, given a list of options, can rank those options in a precise order of preference. Each person has different choices which are set, not changing over time.

Name: Eke Goodness Chisom
Department: Public Administration and Local Government (100 Level)
Reg. No: 2021/245859

Answers
Utility is the ability to satisfy (eliminate) human needs of goods and services. Utility is basically a psychological concept. The use of goods to meet the needs, on theanother hand, reduces the severity of the need while also reducing the benefits provided from each unit. The severity of the commodity determines the utility, not the kind of need. In this case, the benefit will decrease as the amount of a good that people have increases because as the amount of that good increases, the severity of the need decreases.

In economics, utility theory tries to explain the behavior of individual consumers in an economy. Utility theory argues that each person, given a list of options, can rank those options in a precise order of preference. Each person has different choices which are set, not changing over time
The utility maximization assumption is based on Bentham (1789). In the original use of Bentham, utility is expressed as the experience of pain and pleasure and emphasizes what to do besides what we will do.

The expected utility theory is also widely used in modeling preferences related to risky alternatives in many areas where economic, financial, and uncertain decision processes are examined. However, this theory is far from unproblematic.

Utility in economics was first coined by the noted 18th-century Swiss mathematician Daniel Bernoulli. Since then, economic theory has progressed, leading to various types of economic utility.

Also, utility is subjective. People consume the goods because they are beneficial. The utility of a good varies from individual to individual. For example, playing football very well for a football player may not be useful for someone who does not know how to play football. Even the benefit or utility of the same goods and services for the same person may be different at different times.

Theories of Utility
1. Ordinal utility: Which cannot be measured, Early economists of the Spanish Scholastic tradition of the 1300s and 1400s described the economic value of goods as deriving directly from this property of usefulness and based their theories on prices and monetary exchanges.
This conception of utility was not quantified, but a qualitative property of an economic good. Later economists, particularly those of the Austrian School, developed this idea into an ordinal theory of utility, or the idea that individuals could order or rank the usefulness of various discrete units of economic goods.

Austrian economist Carl Menger, in a discovery known as the marginal revolution, used this type of framework to help him resolve the diamond-water paradox that had vexed many previous economists. Because the first available units of any economic good will be put to the most highly valued uses, and subsequent units go to lower-valued uses, this ordinal theory of utility is useful for explaining the law of diminishing marginal utility and fundamental economic laws of supply and demand

2. Cardinal utility: Which can be measured. Economists (cardinal beneficiaries) who argue that the benefit can be measured accept that every good or group of goods can be measured in a certain utility unit.

To Bernoulli and other economists, utility is modeled as a quantifiable or cardinal property of the economic goods that a person consumes.
To help with this quantitative measurement of satisfaction, economists assume a unit known as a “util” to represent the amount of psychological satisfaction a specific good or service generates for a subset of people in various situations.

The concept of a measurable util makes it possible to treat economic theory and relationships using mathematical symbols and calculations.

However, it separates the theory of economic utility from actual observation and experience, since “utils” cannot actually be observed, measured, or compared between different economic goods or between individuals.

If, for example, an individual judges that a piece of pizza will yield 10 utils and that a bowl of pasta will yield 12 utils, that individual will know that eating the pasta will be more satisfying. For the producers of pizza and pasta, knowing that the average bowl of pasta will yield two additional utils will help them price pasta slightly higher than pizza.

Additionally, utils can decrease as the number of products or services consumed increases. The first slice of pizza may yield 10 utils, but as more pizza is consumed, the utils may decrease as people become full. This process will help consumers understand how to maximize their utility by allocating their money between multiple types of goods and services as well as help companies understand how to structure tiered pricing.

Cardinal utility theory is based on three basic concepts, namely, marginal utility, total utility, and diminishing marginal utility.

Others theories of Utility includes;
– Expected utility: The expected utility is the result obtained by multiplying the potential utility, which is the result of a decision under uncertainty, by the probability of the event taking place.
– Expected utility theory: All individuals who follow a rational utility optimization process calculate the probability of occurrence for each event in the case of uncertainty by Bayesian methods. The expected utility is maximized by multiplying the expected probabilities from the events with the calculated

No 2: Different views of utility according to two schools of thought
1. Ordinal
2. Cardinal

Ordinal Utility
Ordinal Utility is propounded by the modern economists, J.R. Hicks, and R.G.D. Allen, which states that it is not possible for consumers to express the satisfaction derived from a commodity in absolute or numerical terms. Modern Economists hold that utility being a psychological phenomenon, cannot be measured quantitatively, theoretically and conceptually. However, a person can introspectively express whether a good or service provides more, less or equal satisfaction when compared to one another.

In this way, the measurement of utility is ordinal, i.e. qualitative, based on the ranking of preferences for commodities. For example: Suppose a person prefers tea to coffee and coffee to milk. Hence, he or she can tell subjectively, his/her preferences, i.e. tea > coffee > milk.

Cardinal Utility
The notion of Cardinal utility was formulated by Neo-classical economists, who hold that utility is measurable and can be expressed quantitatively or cardinally, i.e. 1, 2, 3, and so on. The traditional economists developed the theory of consumption based on cardinal measurement of utility, for which they coined the term ‘Util‘ expands to Units of utility. It is assumed that one util is equal to one unit of money, and there is the constant utility of money.

Further, it has been realised with the passage of time that the cardinal measurement of utility is not possible, thus less realistic. There are many difficulties in measuring utility numerically, as the utility derived by the consumer from a good or service depends on a number of factors such as mood, interest, taste, preferences and much more.
No 3: Explain the demand for and pricing of
productive factors emphasing on the labour market

The concept of labour market can be viewed as a ‘factor market.’ Factor markets provide a way for firms and employers to find the employees they need.

The law of demand applies in labor markets this way: A higher salary or wage that is, a higher price in the labor market leads to a decrease in the quantity of labor demanded by employers, while a lower salary or wage leads to an increase in the quantity of labor demanded.

Therefore, demand for labour is a concept that illustrates the amount of labour a firm is willing to employ at a particular wage rate. However, the determination of equilibrium in the labour market will also depend on the supply of labour.

Equilibrium in the labour market depends on the wage rate firms are willing to pay and the amount of labour willing to provide the necessary work.

Demand for labour curve
As we said, the demand for labour shows how many workers an employer is willing and able to hire at a given wage rate at any given time. The labour demand curve shows an inverse relationship between the employment level and the wage rate.

What is the demand for labour
The concept of labour market can be viewed as a ‘factor market.’ Factor markets provide a way for firms and employers to find the employees they need. The demand for labour shows how many workers the firms are willing and able to hire at a given time and wage rate.

Therefore, demand for labour is a concept that illustrates the amount of labour a firm is willing to employ at a particular wage rate. However, the determination of equilibrium in the labour market will also depend on the supply of labour.

Equilibrium in the labour market depends on the wage rate firms are willing to pay and the amount of labour willing to provide the necessary work.

Factors affecting the demand for labour
Many factors that can affect the demand for labour.
1. Labour productivity
If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase. This would shift the labour demand curve outwards.

2. Changes in technology
Changes in technology can cause the demand for labour to increase and decrease depending on the situation.

If technological changes make labour more productive relative to the other factors of production (such as capital), firms would demand an increased amount of workers and substitute the other factors of production with new labour. However, with the production and subsequent competition from other firms, we could assume that chip development could become automated. The subsequent result would be a replacement of labour with machines. This would shift the labour demand curve inwards

3. Changes in the number of firms
Changes in the number of firms operating in the industry can have an immense effect on the overall labour market. This is because demand for a certain factor can be determined by the number of firms currently utilising that factor.

4. increase in the number of firms would result in an outward shift in the labour demand curve.
Changes in demand for a product that labour produces.

If there is an increase in demand for new vehicles, we would likely see an increase in demand for raw materials used in vehicle production. This would lead to an increase in demand for workers, as firms would need people to manufacture the vehicles. This would shift the labour demand curve outwards.

5. Profitability of firms
If a firm’s profitability increases, it will be able to hire more workers. This will lead to an increase in the demand for labour. Conversely, a firm that is making no profit and is consistently registering losses will need to layoff workers as it will not be able to pay them anymore. This would subsequently reduce the demand for labour and shift the demand curve of labour inwards.

1 Utility theory is based on the fact that satisfaction which consumers derived from consumption of goods and services can be measure quantitative, utility theory bases its beliefs upon individuals’preferences. It Is a postulated in economics to explain behaviour of individuals based on the premise people can consistently rank order their choices depending upon their preference. The economic utility of good and service is important to understand because it directly influences demand and therefore the price of that good or service.
2 Cardinal school of thought: this approach emphasises that utility us measurable. That is, after consuming a given quantity of commodity the consumer can simply evaluate his satisfaction through the use of figures range from zero to infinity.
ii Ordinal school of thought: this states that utility cannot be measured in exact numbers but can be ranked or put into order. This approach argues that utility is completely a psychological element and it cannot be expressed in Cardinal numbers.
3 If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase. The demand for labour is an economic principle derived from the demand for a firm’s output. That is if demand for a firm’s output increases, the firm will demand more labour, thus hiring more staff.

1.)Utility refers to the ability of goods and services to satisfy unlimited human wants. It can also be viewed as satisfaction, pleasure, or fulfilment an individual derives from the consumption of goods and services.
2.) The cardinal school of thought and ordinal school of thought.
Cardinal school of thought; This school of thought emphasizes that utility is measurable. This means that the quantity of goods and services that satisfies the need of a consumer can be evaluated through the use of figures ranging from zero to infinity.
Ordinal school of thought; This requires that consumers make a scale of preference by choosing between the various commodities that gives one the same level of satisfaction.
This approach assumes that utility can be ranked at various levels of consumption.

3.)The demand for labour market;The demand for labour for example, is not demand for labour itself but infact, demand for goods and services which the labour produces.The demand and supply for labour determine the wage or price paid for labour services.
Like all prices, the price of labour(the wage ) depends on supply and demand.

Name: Emerhe Lucky Ejirooghene
Reg no: 2021/246367
Email: ejirochosen@gmail.com

1. THE ELEMENTARY THEORY OF UTILITY IS:
It is based on the fact that the satisfaction consumer derives from a product can be measured quantitatively. It is a theory postulated in economics to explain the behaviour of individuals based on the premise people can consistently rank order their choices depending on their preferences. Each individual will show different preferences, which appear to be hard-wired within each individual. We can thus state that individuals’ preferences are intrinsic. Any theory, which proposes to capture preferences, is, by necessity, an abstraction based on certain assumptions. Utility theory is a positive theory that seeks to explain the individuals’ observed behaviour and choices.

2a. CARDINAL SCHOOL OF THOUGHT: This method emphasizes that utility is measurable. That is, after consuming a given quantity of a product the consumer can analyse his satisfaction through the use of figures which range from zero to infinity.
Assumptions: This implies that marginal utilities decline or diminish with each additional unit of consumption, known as the Law of Diminishing marginal utility. But, the marginal utility of money continues frequently throughout when the individual is spending money on a good or service.
Cardinal Utility is the concept that economic welfare can be directly observable and be given a value. For example, people may be equipped to communicate the utility that consumption gives for certain goods. For example, if a Jeep car gives 5,000 units of utility, a BMW car would give 8,000 units.

2b. THE ORDINAL SCHOOL OF THOUGHT:
-)The ordinal method to consumer utility states that utility/satisfaction cannot be measured in specific numbers but can only be ranked or put into order. This approach argues that utility/satisfaction is completely a psychological element and it cannot be expressed in cardinal numbers.
Assumption: This analysis assumes the rational consumers whose objective is to maximize the utility under the budget constraint. The utility is measured ordinally by comparing the satisfaction whether higher or lower by consuming different bundles of goods.
In this way, the measurement of utility is ordinal, i.e. qualitative, based on the ranking of preferences for commodities. For example: Suppose a person prefers tea to coffee and coffee to milk. Hence, he or she can tell subjectively, his/her preferences, i.e. tea > coffee > milk.

3. The demand for and pricing of productive factors emphasizing the labour market:
The demand for labour shows how many workers the firms are willing and able to hire at a given time and wage rate. The concept of the labour market can be understood as a factor market. Factor markets provide a way for firms and employers to find the employees they need. Labour factors drive the supply and demand for labour. Those seeking employment will supply their labour in exchange for wages. Businesses demanding labour from workers will pay for their time and skills. Therefore, demand for labour is a concept that illustrates the amount of labour a firm is willing to employ at a particular wage rate. However, the determination of equilibrium in the labour market will also depend on the supply of labour. Equilibrium in the labour market depends on the wage rate firms are willing to pay and the amount of labour willing to provide the necessary work.

1. What Is Utility?
In economics, utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisfaction or benefit derived from consuming a good or service. Economic theories based on rational choice usually assume that consumers will strive to maximize their utility.

The economic utility of a good or service is important to understand because it directly influences the demand, and therefore price, of that good or service. In practice, a consumer’s utility is usually impossible to measure or quantify. However, some economists believe that they can indirectly estimate what is the utility of an economic good or service by employing various models.
Understanding Utility
The utility definition in economics is derived from the concept of usefulness. An economic good yields utility to the extent to which it’s useful for satisfying a consumer’s want or need.
1
Various schools of thought differ as to how to model economic utility and measure the usefulness of a good or service. Utility in economics was first coined by the noted 18th-century Swiss mathematician Daniel Bernoulli.
2
Since then, economic theory has progressed, leading to various types of economic utility.

Ordinal Utility
Early economists of the Spanish Scholastic tradition of the 1300s and 1400s described the economic value of goods as deriving directly from this property of usefulness and based their theories on prices and monetary exchanges.
This conception of utility was not quantified, but a qualitative property of an economic good.
3
Later economists, particularly those of the Austrian School, developed this idea into an ordinal theory of utility, or the idea that individuals could order or rank the usefulness of various discrete units of economic goods.
4

Austrian economist Carl Menger, in a discovery known as the marginal revolution, used this type of framework to help him resolve the diamond-water paradox that had vexed many previous economists. Because the first available units of any economic good will be put to the most highly valued uses, and subsequent units go to lower-valued uses, this ordinal theory of utility is useful for explaining the law of diminishing marginal utility and fundamental economic laws of supply and demand.
5

Cardinal Utility
To Bernoulli and other economists, utility is modeled as a quantifiable or cardinal property of the economic goods that a person consumes.
2
To help with this quantitative measurement of satisfaction, economists assume a unit known as a “util” to represent the amount of psychological satisfaction a specific good or service generates for a subset of people in various situations.
5
The concept of a measurable util makes it possible to treat economic theory and relationships using mathematical symbols and calculations.

However, it separates the theory of economic utility from actual observation and experience, since “utils” cannot actually be observed, measured, or compared between different economic goods or between individuals.
6

If, for example, an individual judges that a piece of pizza will yield 10 utils and that a bowl of pasta will yield 12 utils, that individual will know that eating the pasta will be more satisfying. For the producers of pizza and pasta, knowing that the average bowl of pasta will yield two additional utils will help them price pasta slightly higher than pizza.

Additionally, utils can decrease as the number of products or services consumed increases. The first slice of pizza may yield 10 utils, but as more pizza is consumed, the utils may decrease as people become full. This process will help consumers understand how to maximize their utility by allocating their money between multiple types of goods and services as well as help companies understand how to structure tiered pricing.

Economic utility can be estimated by observing a consumer’s choice between similar products. However, measuring utility becomes challenging as more variables or differences are present between the choices.

2. In Plato’s Republics and in his other writings we see a development of idealism. According to him, every object of our experience is nothing but shadow. That is saying that it is not in a pure state of reality. Whatever we perceive is merely a poor copy of the reality that exists in another world which he designates as the world of Forms or Ideas. Thus Plato’s Idealism talks of two worlds: the world of shadows and the world of Ideas. The latter is replete with absolute perfection, real, unchangeable, universal and eternal realities whereas the former is the world of imperfect copies of things residing in the real world of ideas. The implication is that every material thing must have its true copy in the world of ideas. Idealist would say that even the pen you are having now is only an imperfect copy or a shadow of the ideal pen in the world Ideas. Though there may ne various strands of idealism, the basic tenet is the emphasis that existence is explained in terms of the mind and its function.

Other Views on Idealism

Since Plato, there have been many understanding of idealism. Descartes is one such Idealist. He holds that the most important element in the nature of knowledge is mind or spirit. This idea is beautifully expressed in his popular philosophical dictum. Corgito ergo sum (I think, therefore I exist). This idealistic statement has so much implication for Descartes who doubted the reality of anything having material nature and would only accept as reality the thought that he is thinking. Bishop George Berkeley also advanced the school of idealism in modern times by his esse est percipi (to be is to be perceived) . What is real is that which can be perceived, what cannot be perceived is unreal.

To put it more correctly again, the central thesis of idealism is that true knowledge can be derived from reason alone since it is only the faculty of reason that can grasp or extract from material things their spiritual forms or essences. The faculty of the senses provides the mind with imperfect, unstable and changing knowledge of physical objects.

Educational Implication of Idealism

1. For Plato, Education simply means stimulation of the mind to recall that which it already knows before its being in the world. He taught that the soul I born with innate knowledge which it lost with contact with the material world (human body). Thus the concept of school and education is to create an enabling environment where students are encouraged to recall and embrace the concept of the Good and the universal truth that already exist in their soul which has been forgotten. An idealistic educational system would concern itself with ideas of things. The goal of education should be connected with the lifetime work of searching for true ideas. It should be to cultivate the human mind.

2. Idealism prefers the world of the spiritual to the world of material things. Thus, in education, effort is made to create an enabling environment for the orientation of the youngster towards spiritual things or toward ideas.

3. As a result of the basic tenet of Idealism, educational curriculum is made of humanities (languages, literature, philosophy, religion, etc) and social studies. These subject are idea-based. Thus they are to awaken in students the basic ideas of the universe. They help in the cultivation of the mind. Not that idealist do not consider physical training, vocational training and sciences, they consider them but only in the subordinate manner.

Realism

Realism as a philosophy is traceable to Aristotle, the famous student of Plato, (384-322 BC). He is acclaimed to be the father of realism just as Plato is believed to be the propounder of idealistic tradition in Western Philosophy.

The contention of Realism is that objects of our sensual perceptions are real in themselves, whether the mind perceives it or know it or not. The basic tenet of realism is that reality and knowledge of things can be acquires independent of the mind that perceives them. In other words reality is extramentasl and not intramental, i.e. it exists outside the mind and not within the mind as ideas. The implication of the realist epistemology is that everyday experience is true knowledge. “Our dependable knowledge if external reality is possible. Physical reality asserts, as fact, that the actual sticks, stones and trees of the universe exist whether or not there is a human mind to perceive them”. Ozmon & Craver (1995). “The realist prioritizes a worl of ‘things; as opposed to a world of idea Jacobsen, (1842-1910).

Some of the proponents of Realism are Baruch Spinoza (1632-1677), John Locke (1632-1704), American Philosopher-Psychologist, William James, (1842-1910), etc.

Realism is antithetical to Idealism. It upholds that the view that matter is real and not shadows or “copies” of the real which exist in the spiritual/immaterial world. In its proposition, realism says that our concrete materials world is capable of furnishing human mind with reality. And these realities are independent of the perceiving mind. It is in opposition to \berkeleyan theory of esse est percipi (to be is to be perceived) which virtually equares existence with perception such that an object cannot be said to exist if there is no body or some ‘mind’ to perceive it. Agudosi (2033:58)

Realism is like an umbrella term that covers many other philosophies which can be said to be sub-schools of realism. These sub-schools believe that reality is perceptible, concrete and outside the mind. Thus we have the following ‘Realisms’.

1. Aristotelian Realism

2. Scholastic Realism

3. Natural or Scientific Realism

Aristotelian Realism: This is also known as classical realism because it is the premier realism of western culture. As the name suggests, it is an intellectual product of Aristotle. He was a student of Plato, but disagreed with his master on what is the nature of human knowledge. Do we actually perceive things the way they are, or do we perceive them as they appear to us? That is to ask if the concrete data of our experiences are real or imaginary? That is why he wrote on almost all the fields of human knowledge: poetry, rhetoric, ethics, politics, meteorology, embryology, physics, mathematics, metaphysics, anatomy, physiology, logic, dreams and so forth.

“Aristotle viewed reality as a uniting of both actuality (form) and potentiality (matter). Both must be united in order for something to be real or to truly exist”, and that is the principle of his Aristotelian Hylemorphism. All things are made of matter. What makes one matter different from another? It is the form (morphe), the differentiating or the individuating principle of matter. It is evident that every object of our daily experience is made up of matter and form and it is this co-existence of matter and form in reality that Aristotle designates as Hylemorphism. It is then the form that make something what it is, as against or different from what is not. When both matter and form are not present, knowledge is not possible.

Aristotle described the relationship between form and matter with the Four Causes:

Material cause – the matter from which something is made;
Formal cause – the design that shapes the materials object;
Efficient cause – the agent that produces the object; and
Final cause – the direction toward which the object is tending.
Through these different forms, Aristotle demonstrated that matter was constantly in a process of change. He believed that God, the Ultimate Reality held all creation together. Organization was very important in Aristotle’s philosophy. He maintained that human beings as rational creatures are fulfilling their purpose when they think, and thinking are their highest characteristic.

Furthermore, realism unlike idealism does not talk about dual world of matter and form in order to explain human knowledge. For realists, there is only “a world” of reality.

Educational Implications of Realism

1. Religious realists do not limit knowledge to the phenomenal world alone, but hold that knowledge acquired through the senses is real; rational knowledge does not form the entire domain of reality. There is a being responsible for their existence. The cosmos are real, and they point to the existence of a higher Being. Furthermore, the study of God reveals that man always depends on God for his perfection and self-fulfillment. Therefore, education must recognize and incorporate this fact. Okafor (1981) writes that this is the basic educational task of scholastics. “The two domains (the natural and the supernatural) are complimentary elements in man’s effort towards the attainment of his ultimate self-fulfillment and complete actualization”.

2. The scientific realism sees the environment and the training of the senses for perception as against empty memorization of abstract things. It is a total rejection of the classical method whereby the child is made to memorizing knowledge by rote system. The child is given enormous freedom to discover knowledge and is given freedom to think through situations rather than accepting authority as source of human knowledge. One major criterion for knowledge here is the inductive method of observation, experimentation, formulation of hypothesis and laws which eventually form what is known today as scientific knowledge. This implies that nay knowledge that cannot be verified inductively is committed to the flames, and more so are dogmas. Education is better dome God-free.

Appreciable is the influence of Scientific knowledge to life. It has actually advanced the welfare of man in the society. But care must be taken not to reduce life to what can be tested, evaluated and decided in the laboratory. Life is always larger than scientific logic.

3. When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.

Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.

BREAKING DOWN Demand for Labor
Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage

Name: Ifezue Michael Ikenna
Reg No: 11316713FF
Faculty: Vocational and Technical.    Education.
Department: Business Education

NO.1
  Theory of Utility
In Economics, the theory of utility tends to explain the behaviors and actions of individuals and consumers towards a commodity or commodities in an economy within a given time. Theory of Utility argues that each person given a list of commodity, will have to arrange the commodities in preferences.
Utility denotes the choices of consumers,  the behaviors of a consumer towards a particular goods,expressing the value of the commodity. 
For example   a consumer  loves to consume a particular  commodity always.  Like an individual always preferring to consumea particularproduct always, showing he values the product.  Denoting the useful of the product he is consuming

  NO.2
  The concept of utility can be analysed basically by two school of thought and they are
a: The ordinal school of thought
b: The cardinal school of thought

The cardinal school of thought emphasis that utility is measurable. This means that the quantity of goods or services that satisfies the need of a consumer can be evaluated through the use of figures ranging from zero to infinity.

The  ordinal utility required that consumers make a scale of preference by choosing between the various commodities that gives one the same level of satisfaction.

  NO.3
  This explains that when producing goods and services,  capital and labour are major and a necessity to a production process. The demand for labour is an economic principle that also determines the effectiveness of a firm in satisfying the demands.
The demand for labour is constant to demand of the society.  Thus ,if there is high demand of a product,  the firm tends to employ laborer  for efficiency of the firm, and the vice versa. Hence Demand for labour and demand for products varies each other.

Thank you.

Answers
1) utility is defined as the satisfaction level a consumer receives from buying and consuming and using a particular product or services.
Utility theory is based on the fact that satisfaction which consumers derived from consumption of goods and services can be measured quantitative.
Alfred Marshall theory states that utility of a thing to a person at a time is measured by the extent to which it satisfies his want.bases is beliefs upon individuals preference.it is a theory postulated in economics to explain behavior of individual based on the premises people can consistently rank order their choices depending upon their preferences.

Jeremy bentham’s (1748-1832 )moral philosophy centered on two assumptions , the goodness or badness of experience is quantifiable and the lord quantities obtained can be added across people.

Types of utility are; possession utility,time utility,place utility and form utility.

2) Cardinal school of thought and ordinal utility
The cardinal utility believes in measuring the satisfaction level in Utils .
Ordinal utility believes that the satisfaction level cannot be measured or evaluated , however, it can be leveled.
Differences;
Cardinal can be measured based on utils while ordinal is rank based on satisfaction.
Cardinal is less practical while ordinal is more practical and sensible.
Cardinal the theory was applied by prof. Marshall (afred) while ordinal was applied by prof. J.R Hicks.
Cardinal other name is utility analysis while ordinal is indifferent curve analysis.

3) When producing goods and services, businesses requires labour and capital as inputs to their production process. Labour market factors drives the supply and demand for labour in exchange for wages businesses demanding their labour from workers will pay for their time and skills.

Senator-Odurukwe Nene Abby
100L
2021/243517
Abbysenator@gmail.com
Nursing sciences

1.Briefly discuss the elementary theory of utility.
The benefits or satisfaction which an individual gets from consuming a good or service is known as utility. The concept of utility is used to explain a consumer’s tastes and preferences. Utility is important in determining why different goods have different costs and levels of demand. A product with high utility usually has more demand, which means they can command higher prices. Utility expresses an economic concept that has a basis in reality, but cannot measure the exact value that a product provides. This means that there is no way to say that, for example, an ice cream offers 1 unit of utility, and a plate of jollof rice offers 4 unit of utility. One example of utility is the satisfaction that one gets when they eat food. People need water to survive, but some water have higher quality than others.Drinking distilled water offers more utility than drinking dirty water because it satisfies a persons thirst without the potential of that individual falling sick.

2.Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.
a.) Cardinal School of thought b.) Ordinal School of thought
a.) Cardinal School of thought; This approach explains that utility can be measured. This means that after an individual consumes a good, his satisfaction can be measured or evaluated through the use of figures ranging from 0 to infinity.

b.) Ordinal School of thought; This explains that the level of satisfaction obtained from a good cannot be measured using numbers but can be arranged in the order of preference of the consumer.

3.) Explain the demand for and pricing of productive factors emphasizing on the labour market.

The demand for factors of production is a derived demand. Using labour as a case study, the demand for labour isn’t the demand for labour itself instead it is the demand for the goods and services the labour factor offers. This shows that when the demand for goods increases, the demand for the factor will produces that exact good will increase as well. There are certain conditions that affects the demand for a factor of production. These include;
-There would be high demand for a factor of production if it is highly important in the production process.
-There would be low demand for a factor of production if it has close substitutes.
Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. Using a beans factory as an example; If the extra bags of beans that is produced by hiring one more unit of labor adds more to total revenue of the business than it adds to the total cost, the firm will increase total profit by increasing its use of labor. It will continue to hire more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor. According to economic theory, profit-maximizing firms will hire workers up to the point where the marginal revenue product is equal to the wage rate because it is not profitable for a firm to pay its workers more than it will earn in revenues from their labor.

-Pricing of factors of production is associated with the prices that an entrepreneur pays to avail the services rendered by the factors of production. If there is an increase is wage rate, demand for labour will fall and supply will rise. This may cause competition among labourers and will influence the wage rate to fall resultantly. If there’s a fall in wage rate then supply of labour will fall and demand will rise which may influence the producers to employ more labour at a lower wage rate

NAME : NDUKWU MIRACLE
REG.NO: 2021/243991
DEPARTMENT: BUSINESSES EDUCATION
FACULTY: VOCATIONAL AND TECHNICAL EDUCATION

ECO 101
ANS(1)
I’m economics,utility theory tries to explain the behavior of individual consumeer in an economy. Utility theory argues that each person,given a list of options,can rank those options in a precise order of preference.each person has different choice which are set,not changing overtime.

ANS(2)
2(a)PHILOSOPHICAL SCHOOL OF THOUGHT
b)ECONOMICS SCHOOL OF THOUGHT

2(a) PHILOSOPHICAL SCHOOL OF THOUGHT:In Plato’s Republic amd in his other writing we see a.development of idealism,According to him,every object of our experience is nothing but shadow,that is saying that it is not in A pure state of reality.
2(b) ECONOMIC SCHOOL OF THOUGHT:in the history of economic thoughts,a school of economic thoughts is a group of economic thinkers who share or shares a common perspective on the way economic works.

ANS(3)the demands for labour isban economic principle derived from the demands for a firms outline.that is,if demands for a firms output increases,the firm will demand more labour thus hiring more staff….

NAME: ANAGHARA ESTHER CHIBUZOR
MATRIC NO.: 2021/241940
DEPT: ECONOMICS
EMAIL: anagharachibuzor205@gmail.com
COURSE CODE: ECO 101

Q1 ELEMENTARY THEORY OF UTILTY.
Utility theory in economics pertains to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness. With respect to theory, the utility of an item tends to be closely correlated to its price. An item such as gold, which is very useful and thus has great utility (combined with its scarcity), is very expensive. Total utility is closely tied to the bare concept of utility. Total utility points to the aggregate amount of usefulness and fruition there is to be gained from the use of a specific good, service, or other item. Furthermore, the abstract measurement of utility is another key concept of the theory. Although it’s hard to calculate the exact utility of something, economists use abstract measurements to capture the usefulness of things.

Q2. VIEWS OF UTILITY ACCORDING TO THE TWO SCHOOL OF THOUGHTS.

ORDINAL SCHOOL OF THOUGHT.
The concept of ordinal utility states that the level of satisfaction a consumer obtains after consuming various commodities cannot be measured in numbers but can be arranged in the order of preference.

CARDINAL SCHOOL OF THOUGHT.
The Cardinal Utility approach is propounded by neo-classical economists, who believe that utility is measurable, and the customer can express his satisfaction in cardinal or quantitative numbers, such as 1,2,3, and so on.These quantitative measures is also known as “utils”.

Q3. THE DEMAND FOR AND PRICING OF PRODUCTIVE FACTORS EMPHASIZING ON THE LABOUR MARKET.

The demand for labour shows how many workers the firms are willing and able to hire at a given time and wage rate.
Therefore, demand for labour is a concept that illustrates the amount of labour a firm is willing to employ at a particular wage rate. However, the determination of equilibrium in the labour market will also depend on the supply of labour. Equilibrium in the labour market depends on the wage rate firms are willing to pay and the amount of labour willing to provide the necessary work.

1. Theory of Utility: Utility may be defined as the ability of a commodity or service to satisfy consumers wants. Therefore when a consumer derives satisfaction from the consumption of any commodity or service, it can be said that commodity or service possesses utility. In other words, any commodity or service that possesses utility is useful to the consumer that used it. As a result of the fact that usefulness is a relative term, therefore, what may be useful to one person may not be to another. Utility
therefore, is relative to a consumer depending on the time, place, form, nd possession etc. A commodity that can satisfy a consumer’s want at a particular points in time and place may not satisfy another’s want.Utility then depends on the form of the commodity, individual’s time and place.

2. Cardinal school of thoughts: The approach emphasizes that utility is measurable. That is after consuming a given quantity of a commodity the consumer can aim or calculate his satisfaction through the use of figures which range from 0 to infinity. Some economists who belong to this school of thought argue that utility can be measured subjectively in units called “Utils”. The assumptions of the cardinal approach are;
I. Utility is measurable
ii. The consumer is rational.
iii. There is diminishing marginal utility.
iv. Total utility (TU) depends on the quantity consumed.
v. Money income of the consumer is held constant.

b. Ordinal school of thoughts: Economist who belong to this school argue that it is not possible to measure utility (satisfaction). They opine that although utility cannot be precisely measured, it is possible for a consumer to make a choice between various bundles of commodities by ranking them according to the level of satisfaction expected from each bundle without specifying exact units of utility. The ordinal approach is based on the following assumptions:
I. Total utility is determined by the quantities of commodities consumed.
ii. Rationality of the consumer. He is rational because he considers the implications of his economics choices.
iii. Utility order. The consumer can rank is preferences based on expected level of satisfaction.
iv. Preferences of consumers can be ranked in terms of indifference curves which cannot the marginal rate of substitution of commodities.
v. Consistency and transitivity of choice. The consumer is consistent in his choice and preference of one commodity over another.

3. Labour market like other goods market in the economy are governed by the forces of demand and supply. The supply and demand for labour determine the wage or price paid for labour services. Like all prices, the price of labour (the wage) depends on supply and demand. The demand curve reflects the value of marginal product of labour. Therefore in equilibrium, workers receive the value of their marginal contribution to the production of goods and services.

NAME: NDUKWU MIRACLE CHINAZA

REG. NO:2021/243991

FACULTY:VOCATIONAL AND TECHNICAL EDUCATION.

DEPARTMENT:BUSINESS EDUCATION

ECO 101

ANS(1)..In economics,utility is a term used to determine the worth or value of a good or services.more specifically,utility is the total satisfaction or benefit derived from consuming a goods or services.Utility theory argues that each person,given a list of options,can rank those options in a process order of preference.Economic theories based on rational choice usually assumptions that consumers will strive to maximize their utility..

ANS(2)…
i)PHILOSOPHICAL SCHOOL OF THOUGHT.
ii)SCHOOL OF ECONOMIC THOUGHT.

i)PHILOSOPHICAL SCHOOL OF THOUGH: in Plato’s Republic and in his other writing s we see a development of idealism.According to him every object of our experience is nothing but shadow.That is saying that it is not in a pure state of reality.whatever we perceive is merely a poor copy of the reality that exist in another world which he designated as the world of forms of ideas,This Plato’s idealism talks of two worlds: THE WORLD OF SHADOW AND THE WORLD OF IDEAS.

ii)SCHOOL OF ECONOMIC THOUGHT:in the history of economics thought,a school of economic thought is group of economic thinkers who shares a common perspective on the way economies work.While economist, do not always fit in particular schools,particularly in modern times classifying economist school of thought is common. Economic thought maybe roughly divided into three phrases.
Currently the great majority of economist follow an approach referred to as MAINSTREAM ECONOMIST….

ANS(3)…The demand for labour shows how many workers a firm are willing to hire at a given time and wage rate.
Therefore,demand for labour is concept that illustrates the amount of labour a firm is willing to employer at a particular time and wage rate.However,the determination of equilibrium in the labour market will also depend on the supply of labour.Equilibrium in the labour market depends on the wage rate forms are willing to pay and the amount of labour willing to provide the necessary work.

1. Theory of Utility
Utility theory bases its beliefs upon individuals’ preferences. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences. Each individual will show different preferences, which appear to be hard-wired within each individual. We can thus state that individuals’ preferences are intrinsic. Any theory, which proposes to capture preferences, is, by necessity, abstraction based on certain assumptions. Utility theory is a positive theory that seeks to explain the individuals’ observed behavior and choices.The distinction between normative and positive aspects of a theory is very important in the discipline of economics. Some people argue that economic theories should be normative, which means they should be prescriptive and tell people what to do. Others argue, often successfully, that economic theories are designed to be explanations of observed behavior of agents in the market, hence positive in that sense. This contrasts with a normative theory, one that dictates that people should behave in the manner prescribed by it. Instead, it is only since the theory itself is positive, after observing the choices that individuals make, we can draw inferences about their preferences. When we place certain restrictions on those preferences, we can represent them analytically using a utility function—a mathematical formulation that ranks the preferences of the individual in terms of satisfaction different consumption bundles provide. Thus, under the assumptions of utility theory, we can assume that people behaved as if they had a utility function and acted according to it. Therefore, the fact that a person does not know his/her utility function, or even denies its existence, does not contradict the theory. Economists have used experiments to decipher individuals’ utility functions and the behavior that underlies individuals’ utility.
2. Two views of utility according to Economic School of Thought
Cardinal Utility
The notion of Cardinal utility was formulated by Neo-classical economists, who hold that utility is measurable and can be expressed quantitatively or cardinally, i.e. 1, 2, 3, and so on. The traditional economists developed the theory of consumption based on cardinal measurement of utility, for which they coined the term ‘Util ‘ expands to Units of utility. It is assumed that one util is equal to one unit of money, and there is the constant utility of money.
Further, it has been realised with the passage of time that the cardinal measurement of utility is not possible, thus less realistic. There are many difficulties in measuring utility numerically, as the utility derived by the consumer from a good or service depends on a number of factors such as mood, interest, taste, preferences and much more.
*Ordinal Utility
Ordinal Utility is propounded by the modern economists, J.R. Hicks, and R.G.D. Allen, which states that it is not possible for consumers to express the satisfaction derived from a commodity in absolute or numerical terms. Modern Economists hold that utility being a psychological phenomenon, cannot be measured quantitatively, theoretically and conceptually. However, a person can introspectively express whether a good or service provides more, less or equal satisfaction when compared to one another.
In this way, the measurement of utility is ordinal, i.e. qualitative, based on the ranking of preferences for commodities. For example: Suppose a person prefers tea to coffee and coffee to milk. Hence, he or she can tell subjectively, his/her preferences, i.e. tea > coffee > milk.
The following points differentiate between cardinal and ordinal utility:

1. Cardinal utility is the utility wherein the satisfaction derived by the consumers from the consumption of good or service can be measured numerically. Ordinal utility states that the satisfaction which a consumer derives from the consumption of product or service cannot be measured numerically.
2. Cardinal utility measures the utility objectively, whereas there is a subjective measurement of ordinal utility.
3. Cardinal utility is less realistic, as quantitative measurement of utility is not possible. On the other end, the ordinal utility is more realistic as it relies on qualitative measurement.
4. Cardinal utility, is based on marginal utility analysis. As against this, the concept of ordinal utility is based on indifference curve analysis.
5. The cardinal utility is measured in terms of utils, i.e. units of utility. On the contrary, the ordinal utility is measured in terms of ranking of preferences of a commodity when compared to each other.
3. Demand for and Price of Labour with respect to Labour Market
Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.
When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.
Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.
Markets for labor have demand and supply curves, just like markets for goods. The law of demand applies in labor markets this way: A higher salary or wage—that is, a higher price in the labor market—leads to a decrease in the quantity of labor demanded by employers, while a lower salary or wage leads to an increase in the quantity of labor demanded. The law of supply functions in labor markets, too: A higher price for labor leads to a higher quantity of labor supplied; a lower price leads to a lower quantity supplied.

1. Utility is defined as the amount of satisfaction the user of a commodity gains at a particular point in time. It is not the same as the usefulness of the commodity.

2. Different views on utility according to the school of taught are; (a) Cardinal school of taught (b) Ordinal school of taught.

(a) Cardinal school of thought : The Cardinal approach to the cosumer behavior argued that utility can be measured in utils.
In other words, it is believed that the satisfaction a consumer derived from the consumption of a particular commodity is measurable in quantitative terms called utils. This approach emphasizes that utility is measurable, that is, after consuming a given quantity of commodity, the consumer can simply evalute his satisfaction through the use of figures which ranges from Zero (0) to infinity (…..).

2b Ordinal school of thought : This concept states that the level of satisfaction a consumer obtains after consuming various commodities. It cannot be measured in numbers but can be arranged in order of preference. e.g; we prefer an apple product to an itel product, but we don’t say by how much it is argued that is more relevant in the real world.
It is also expressed as the utility analysis or indifference curve. This approach argues that utility or satisfaction is completely a psychogical element and it cannot be expressed in Cardinal numbers.

3a. Demand for pricing of products is a concept that decribes the amount of demand for labour that an economy or firm is willing to employ at a given point in time.
This demand may not necessarily be in to the long-run equilibrium. It is determined by the real wage firms are willing to apply for this labour and the number of workers willing to supply labour at that wage.

3b. Factor pricing is associated with the prices that an entrepreneur pays to avail the services rendered by the factors of production. For e.g; an entrepreneur needs to pay wages for labour, rents for availing land and interest for capital so that he or she can earn maximum profit.

No 1
The elementary theory of utility means the level of satisfaction a person derives from consuming a good or service ,when the product or service is useful to the consumer’s needs or wants ,they can achieve a certain level of utility from consuming it,eg we eat something because we are hungry,we drive a car to reach a certain destination.utility is involved in everything we do and we get satisfaction from consuming or using goods or services, utility theory is concerned with explaining individuals choices and measuring the satisfaction level from consuming a good or service,the level of satisfaction is measured in units,utility can be in form ,time and place

No 2
The two schools of thought that examined utility are .
(a)cardinal school of thought
(b)ordinal school of thought
CARDINAL SCHOOL OF THOUGHT_cardinal school of thought is one of the idea that economic welfare can be directly observable and be given a value,this approach emphasizes that utility is measurable,that is after consuming a given quantity of a commodity ,the consumer can supply evaluate his satisfaction through the use of figures from zero to infinity,the idea of cardinal utility is important to rational choice theory,the idea consumers make optimal choices to maximize their utility ,it is an important concept in utilitarianism and neo classical economics.

ORDINAL SCHOOL OF THOUGHT_ordinal concept of utility is propouded by the modern economists which states that it is not possible for consumers to express the satisfaction derived from a commodity in absolute or numerical terms ,in ordinal utility the consumer only ranks choices in terms of preference but we do not give exact numerical figures of utility,modern economists hold that utility being a psychological phenomenon cannot be measured quantitatively ,theoritically and conceptually ,however a person can introspectively express whether a good or service provides more,less or equal satisfaction when compared to one another.

NO 3
In the labour market ,households are on the supply side of the market and firm are on the demand side,in the market for financial capital ,households and firms can be on either side of the market ,they are suppliers of financial capital when they save or make financial investments and demanders of financial capital when they borrow or receive financial investments .
I’m the demand and supply analysis of labour markets the price can be measured by the annual salary or hourly wage received.

Name: Anthony Phoebe.
Registration number: 2021/247111.
Email address: anthonyphoebe7@gmail.com.

(1) Utility refers to the ability of goods and services to satisfy unlimited human wants. It can also be viewed as satisfaction, pleasure or fulfillment an individual derives from the consumption of goods and services.Goods are desired because of their ability to satisfy human wants.
When a consumer derives satisfaction from the consumption of a good or service, then, the good or service consumed possesses utility. This is relative to the consumer depending on time, place, form and possession.

Types of utility
i. Time utility
ii. Form utility
iii.Place utility
iv. Possession utility

Time utility is the amount of satisfaction derived from the consumption of goods and services at a particular time. For example, Cold pure water will be sold more during the heat period than the cold period.

Form utility is the transformation of goods and services from one form to another to confer satisfaction when consumed. For example, the dry corn seeds can not be eaten that way except when processed or ground into corn flour and cooked for consumption.

Place utility is the ability of goods and services to satisfy a need within a location and it’s a function of distribution channels and the physical locations at which goods and services are sold. For example, a shop selling building materials has no satisfaction in a citadel of learning or school environment but will satisfy a need if found in a constructive site.

Possession utility:
This is the satisfaction derived from the ownership of goods and services
For example, a woman who owns a ceramic plate derives satisfaction in using it than when it’s been burrowed.

(2)
The cardinal school of thought:
i Total utility depends on the consumption of goods and services
ii Money income of the consumer is held constant
iii There’s diminishing marginal utility
iv The consumer is rational
v Utility is measurable.
Explanations of the points listed above:
i. Total utility is the aggregate of satisfaction that a consumer derives from the consumption of any particular good or service. It’s the sum up of the consumption made by an individual.
ii. This implies that each additional unit of money provides the consumer with the same level of satisfaction.
iii. Marginal utility diminishes with an increase in total utility.Marginal utility reduces with the consumption of each additional unit.
iv. The consumer makes his choices after considering all the other alternative goods (and services) available in the market .
v. The measurement of usefulness that a consumer obtains from any good. A utility is a measure of how much one enjoys a favourite food, or other goods.

While Ordinal school of thought focuses on the satisfaction a consumer can get from their scale of preference ranked in order.

So,Cardinal Utility is a utility that determines the satisfaction of a commodity used by an individual and can be supported with a numeric value. On the other hand, Ordinal Utility defines that satisfaction of user goods can be ranked in order of preference but cannot be evaluated numerically.

(3)The demand for labour determines the wage or price paid for labour.
An increase in the price of say, egg leads to an increase in workers or the hiring of workers for more production of eggs. This causes the demand curve to shift to the right and vice versa. The demand curve reflects the value of marginal product of labour. Increase in price of egg will increase the marginal product of labour. With higher price of egg, the marginal output from an extra worker in the production of eggs, make the production more valuable than before.

The elementary theory of utility
a) The concept of utility theory: Utility theory is based on the fact that satisfaction which consumers derived from consumption of goods and services can be measured quantitative.
b) meaning of utility:economics, utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisfaction or benefit derived from consuming a good or service. Economic theories based on rational choice usually assume that consumers will strive to maximize their utility.
Utility, in economics, refers to the usefulness or enjoyment a consumer can get from a service or good.
c) Total utility: Total utility is the aggregate amount of satisfaction or fulfillment that a consumer receives through the consumption of a specific good or service. Total utility helps economists understand the demand for goods and service
d) Average utility: Average utility refers to the utility that is obtained by the consumer per unit of commodity consumed. It is calculated by dividing the total utility by the number of units consumed.
e) Marginal utility: Marginal utility (MU) is defined as the additional (cardinal) utility gained from the consumption of one additional unit of a good or service or the additional (ordinal) use that a person has for an additional unit.
Using the same example, if the economic utility of the first slice of pizza is ten utils and the utility of the second slice is eight utils, the MU of eating the second slice is eight utils. If the utility of a third slice is two utils, the MU of eating that third slice is two utils.
f) Law of diminishing marginal utility:The law of diminishing marginal utility states that all else equal, as consumption increases, the marginal utility derived from each additional unit declines.The marginal utility can decline into negative utility, as it may become entirely unfavorable to consume another unit of any product.
g) Utility maximization and derivation of demand curve: Utility maximization refers to the concept that an individual gets a high level of satisfaction with the purchase of the good. When utility is maximized, there is no incentive to alter the expenditure unless there is a change in taste, income, or price. In other words, the marginal utility spent per dollar on each product or commodity is equalized. That is, consumers compare the extra utility from each production with the cost.The demand curve is a visual representation of how many goods are bought at each possible price. It is used to model the price-quantity relationship.
h) Derivation of demand curve from the utility theory: Dr. Alfred Marshall derived the demand curve with the aid of law of diminishing marginal utility. The law of diminishing marginal utility states that as the consumer purchases more and more units of a commodity, he gets less and less utility from the successive units of the expenditure.
:
2) Mention and discuss the different view of utility according to the two schools of thoughts:
There are basically two schools of thought in the analysis of utility and they are as follows:
1. Cardinal school of thought

2. Ordinal school of thought.

CARDINAL SCHOOL OF THOUGHT: This approach emphasizes that utility is measurable. That is, after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which range from zero to infinite. Assumption of cardinal approach includes
i. Utility is measurable
ii. The consumer is rational

iii. There is diminishing marginal utility

iv. Total utility (TU) depends on the quantity consumed.

v. Money income of the consumer is held constant
b) ordinal school of thoughts:Definition: The Ordinal Utility approach is based on the fact that the utility of a commodity cannot be measured in absolute quantity, but however, it will be possible for a consumer to tell subjectively whether the commodity derives more or less or equal satisfaction when compared to another.

3) Explain the demand for and pricing of productive factors emphasizing on the labour market: The firm’s demand for labor. The firm’s demand for labor is a derived demand; it is derived from the demand for the firm’s output. If demand for the firm’s output increases, the firm will demand more labor and will hire more workers. If demand for the firm’s output falls, the firm will demand less labor and will reduce its work force.The labor market comprises four components: the labor force population, applicant population, applicant pool, and the individuals selected.
a) The labour force, or currently active population, comprises all persons who fulfil the requirements for inclusion among the employed (civilian employment plus the armed forces) or the unemploye
b) applicant population: The second component is the applicant population which refers to the people who are applying for a particular job that suits their expertise and skills. Recruiters look first at the labor market and then look next for individuals who meet the skills and qualifications set for a particular job.
c) Applicant pool: An applicant pool consists of all the applicants who are applying for a particular position. The size of an applicant pool can vary depending on the job description, the amount of experience required, the intensiveness of the application process, the competitiveness of the compensation offered, and the avenues through which the job is advertised to potential candidates.
d) The individual selected:
The fourth component is the individuals selected, which simply means the individual or individuals who’ve made it through the screening process and have been hired for the job. Of course, this is judged based on a number of factors, and the person is screened against a carefully determined set of qualifications.

1 utility is a term use to determine the worth or value of a good or service more specifically, utility is the satisfaction or benefits derived from consuming a good or services.
Utility theory bases it’s believe upon individuals preference.it is a theory postulated I’m economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preference. We can this state that individuals preference are intrisian any theory which proposes to get preferences is by necessity abstraction based on certain assumption. Utility theory is a positive theory that seeks to explain the individual observe behavior and choice, the difference between normative and positive aspect of a theory is very important in the discipline of economics. Some scholars argue that economics theories should be normative meaning that they should be prescriptive and tell people what to do.while some argue often successfully that economic theories are designed to explanation of observed behavior of agent in market vice positive in that aspect.
Under the assumption of utility theory, we can assume that people bahaved as if they had a utility function and acted according to it therefore, the fact that a person does not know his or her utility function or even denied it’s existence does not contradict the theory. Economics have used experiment to decipher individuals utility function and behavior that that lies individuals utility.
Individual faces a set of consumption bundles, so we assume that to have a clear preference that enable them to ‘rank order’ all bundle based on desirability that is the level of satisfaction each bundle shall provide to each individual. It ranks ordering based on preference tells as the theory itself has ordinal and cardinal utility
ASSUMPTION OF UTILITY THEORY
1COMPLETENESS: Individuals can have rank order all possible bundles, ranking ordering shows that the theory assume that no matter how many combination of consumption bundle are placed in front of individuals, Each individual can rank them in some order based on the preference this means that the individual can compare any bundle with any other bundle rank them in order of the satisfaction each bundle provide. Mathematically this property where in an individuals preference enable him or her to compare any given bundle with any other bundle is called the completeness proprty of preference
3 MIX IS BETTER: we assume that the individual is indifference to the choice between one week of clothing Alone and one week of food thus choice itself is not preferred over the other.
The mix better assumption about preference says that a mix of two say half
4 RATIONALITY: this is the most important assumption that lays down all of utility theory. Under the assumption of rationality individuals preference avoid any kind of circularity.
Utility theories argues that each person give a list of options can rank those options in a precise order of preference, Each person have difference choice. In economics utility theory governs individuals decision making.
2 THE DIFFERENT VIEW OF UTILITY ACCORDING TO THE TWO SCHOOLS OF TAUGHT
A The ordinal utility
B The cardinal utility
ORDINAL UTILITY: refers to the satisfaction level after consuming any good or services cannot be scaled in numbers. However these things can be arranged in order of preference. Utility is ranked based on satisfaction, it is more practical and sensible. Whereas, these things can be arranged in order of preference. Two English economist John Hick and R.J Allen 1930 argued that the consumer behavior theory be introduced based on ordinal utility. According to the ordinal approach utility is a psychological phenomenon like happiness, welfare, and satisfaction. The ordinal theory is highly subjective and differs across individual therefore it cannot be measured in quantifiable terms the function that represents utility of a products according to it’s preference but does not provide any numerical figure is know as an ordinal utility
A consumer preference can be demonstrated graphically through indifference curves. It becomes easy when there are two types of commodities (xy) when (x1,y1) and (x2,y2). That’s on the same curve line and ( x1,y1)
This is an example of indifference curve map where the preference of goods are shown but not their quantity. The utility according to this approach can be measured in relative terms such as less than and greater than.this approach states that consume behavior can be explained in terms of preference on ranking. Utility can be ranked qualitatively rather than quantitatively
CARDINAL UTILITY
According to this concept, the utility can be expressed similarly to how weight and height are expressed, however the economics lacked a precise unit for utility, Hence the derived a psychological unit termed as util
Until is not regarded as a standard unit because it varies from person to person place to place
APPLICATION OF CARDINAL UTILITY
Welfare Economics
Marginalism
Expected utility theory
Intertemporal utility
3 Demand for and pricing of productive factors emphasizing on the labour.
What is Demand for Labor
When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.

Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.

NAME: EZEMA ONYINYECHI QUEEN
REG NO: 2020/246167

1) Briefly discuss the elementary theory of utility.
2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.
3) Explain the demand for and pricing of productive factors emphasizing on the labour market.
ANSWER
1, Utility is the amount of satisfaction that a consumer derives from the consumption of goods and services.
2a, Cardinal school of thought : this school of thought emphasizes that utility is measurable, this means that the quantity of goods or services that satisfies the need of a consumer can be evaluated through the use of figure ranging from zero to infinity.
2b, Ordinal school of thought: the ordinal approach of utility requires that consumers make a scale of preference, by choosing between the various commodities that gives one the same level of satisfaction.
3, The modern theory of pricing of factors of production gives a satisfactory answer to the problem of determining factor price, according to the theory, just as the price of a commodity is determined by the forces of demand and supply, the price of a factor of production is also determined by the demand for that factor and supply.

Name: Asogwa ThankGod Oluchi
Reg no: 10498980CH
Dept: Public administration
Faculty: Social sciences

The first is utility theory. Assuming that people can consistently rank order their desires, this hypothesis was put forth in economics to explain how people behave. The foundation of utility theory is the capacity to express in numerical terms the satisfaction that consumers derive from using goods and services. The four primary types of utility are form utility, location utility, time utility, and possession utility. These utilities have an impact on an individual’s purchasing decision.
(2) There are essentially two schools of thought that can be used to the analysis of utility, and they are as follows:
Utility can be measured, according to the fundamental school of thought.

This means that, after consuming a specific quantity of a good, the client can readily gauge how satisfied he is by utilising numbers that range from 0 to infinity. The cardinal utility technique was developed by classical economics. England’s William Stanley Nevins, France’s Leon Walras, Germany’s Goossen, and Germany’s Karlmenger (Australia).
The ordinal school of thinking contends that although the satisfaction felt after consuming a good or service cannot be measured, it may be arranged in accordance with individual preferences.

In the 1930s, John Hicks and R.J. Allen, two English economists, argued that the theory of consumer behaviour should be built upon ordinal utility.

(3) Business production processes use labour and capital as inputs to create goods and services. The demand for labour is a concept in economics that is derived from the demand for a firm’s product. In other words, a corporation will require more labour market and recruit more workers if there is a higher demand for its output.Also, if the demand for the firm’s products and services declines, it will need less labour, have a reduced demand for labour, and retain fewer workers.
The labour market’s dynamics affect both the supply and demand for labour. People in need will perform labour in return for cash. Companies that require labour from their employees will pay them for their time and knowledge.

Ezeah Grace Ogechukwu
2021/241632
gracescholastica@gmail.com

1. Define Utility in Economics
What does utility mean in economics? Utility theory in economics pertains to the value or worth of a certain
good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness.
The premise was initialy theorized by Swiss mathematician, Daniel Bernoulli, in the 18th century. Bernoulli
founded the idea with regard to the differing values of things. With respect to theory, the utility of an item tends to
be closely correlated to its price. An item such as gold, which is very useful and thus has great utility (combined
with its scarcity), is very expensive. Total utility is closely tied to the bare concept of utility. Total utility points to
the aggregate amount of usefulness and fruition there is to be gained from the use of a specific good, service, or
other item. Furthermore, the abstract measurement of utility is another key concept of the theory. Although it’s
hard to caculate the exact utility of something, vu economists use abstract measurements to capture the
usefulness of things.

CARDINAL SCHOOL OF THOUGHT: This approach emphasizes that utility is
measurable. That is, after consuming a given quantity of a commodity the
consumer can simply evaluate his satisfaction through the use of figures
which range from zero to infinity. iv. Total utility (TU) depends on the quantity
consumed.

What is Demand for Labor
When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.

What isanOrdinalUtility?
ordinal utility states that the satisfaction gets after consuming a good or service cannot be scaled in
numbers, whereas, these things can be arranged in the order of preference.
The demand for any factor of production, such as labor, physical capital or land is a derived demand because it arises not from the intrinsic utility provided by the factor but because of the value placed on the production it produces by consumers.

Name: IKEH FAVOUR MMESOMA
Reg No: 2021/242466
Email: favourmmesoma155@gmail.com

1. Utility theory is based on the fact that satisfactions consumers derive from consumption of goods and services can be measured quantitatively

Utility may be defined as the satisfaction received from consuming a good or service at any particular time. The economic utility of a good and service is important to understand, because it directly influences demand, and therefore the price of that good or service.
Utility can be said to be relative to consumer and the variations among the individuals or consumers depend on time, place and form.

2. *Cardinal Utility school of thought*
It explains that the satisfaction level after consuming any goods or services can be scaled in terms of countable numbers.
It is less practical
Utility is measured based on utils
Prof Marshall applied the theory

*Ordinal utility school of thought*
satisfaction level after consuming any goods or services can be scaled in terms of countable numbers. It explains that the satisfaction level after consuming any goods or services cannot be scaled in numbers. However, these things can be arranged in the order of preference.
It is more sensible and practical
Utility is ranked based on satisfaction
Prof J.R Hicks applied this theory

3. Demand for labour illustrates the amount of labour a firm is willing to employ at a particular wage rate. However, the determination of equilibrium in the labour market will also depend on the supply of labour.

Equilibrium in the labour market depends on the wage rate firms are willing to pay and the amount of labour willing to provide the necessary work.

Factor pricing is associated with the prices that an entrepreneur pays to avail the services rendered by the factors of production. For example, an entrepreneur needs to pay wages to labor, rents for availing land, and interests for capital so that he/she can earn maximum profit.
An increase in physical productivity causes a corresponding increase in the value of labor, which raises wages.

Name: Ezugwu Jacinta chidiebere
Course:Eco 101
Faculty: Social sciences
Department: Public administration and local government
Matric number:2021/241172
1.The elementary theory of utility is a fundamental concept in microeconomics that seeks to explain how individuals make decisions when faced with scarcity. The theory proposes that individuals make choices based on their preferences, which are defined in terms of utility.
Utility is the satisfaction or happiness that an individual derives from consuming a particular good or service. The theory of utility assumes that individuals are rational and seek to maximize their utility by making choices that will give them the highest possible level of satisfaction.
The concept of utility is often represented mathematically as a utility function, which measures the level of satisfaction that an individual receives from consuming different goods and services. A utility function can be represented as follows:
U(x1, x2, …, xn)
Where U is the utility function, and x1, x2, …, xn represent the quantities of different goods or services that an individual consumes.
The theory of utility proposes that individuals face budget constraints, which limit their ability to consume all the goods and services that they desire. Therefore, individuals must choose how to allocate their resources to maximize their utility within their budget constraints.
The theory of utility also proposes the concept of marginal utility, which refers to the additional satisfaction that an individual derives from consuming one additional unit of a good or service. Marginal utility is typically assumed to decrease as consumption increases, reflecting the idea that additional units of a good or service provide diminishing levels of satisfaction.
In summary, the elementary theory of utility proposes that individuals make choices based on their preferences and seek to maximize their utility by allocating their resources to consume goods and services that provide them with the highest level of satisfaction. The concept of utility is central to microeconomic analysis, and the theory of utility is a fundamental building block for understanding consumer behavior and decision making.

2.The cardinal school of thought is a school of economic thought that developed in the late 19th century and early 20th century. It is also known as the “utility analysis” or “marginal utility” approach. This school of thought is based on the assumption that utility can be measured and that individuals can make meaningful comparisons between different levels of utility.
The cardinal school of thought proposes that utility can be measured on a cardinal scale, which means that it is possible to assign numerical values to the level of satisfaction or happiness that individuals derive from consuming goods and services. This numerical representation of utility is known as utils. According to this school of thought, the total utility that an individual derives from consuming a particular good or service is the sum of the marginal utilities of each additional unit consumed.
The cardinal school of thought also suggests that individuals can make meaningful comparisons between different levels of utility. For example, if an individual derives 10 utils from consuming a slice of pizza and 20 utils from consuming a burger, then the individual can reasonably conclude that the burger provides more satisfaction than the pizza.
One of the main criticisms of the cardinal school of thought is that utility is not directly observable or measurable. This criticism is based on the idea that utility is a subjective experience that varies from person to person and cannot be objectively measured or compared. Another criticism is that the assumption of diminishing marginal utility, which is central to the cardinal school of thought, may not always hold true in real-world situations.
Despite these criticisms, the cardinal school of thought has been influential in the development of microeconomics and has contributed to our understanding of consumer behavior and decision making. The concept of utility and the idea of diminishing marginal utility remain important components of modern microeconomic analysis.
The ordinal school of thought is a school of economic thought that emerged in the early 20th century as a response to the criticisms of the cardinal school of thought. The ordinal school of thought proposes that utility is not measurable on a cardinal scale and that individuals can only make meaningful comparisons between different levels of utility in terms of their preference orderings.
According to the ordinal school of thought, individuals can rank their preferences in terms of the goods and services they consume. For example, an individual may prefer pizza to burgers, and burgers to hot dogs. However, the ordinal school of thought does not assign numerical values to these preferences, but rather only considers the order of preference.
The ordinal school of thought proposes the concept of indifference curves, which represent the different combinations of goods and services that an individual considers equally preferable. Indifference curves are typically drawn on a two-dimensional graph, where each axis represents a different good or service. The slope of an indifference curve represents the marginal rate of substitution, which is the rate at which an individual is willing to give up one good or service to obtain an additional unit of another good or service while remaining indifferent.
The ordinal school of thought suggests that individuals make choices based on their preference orderings and their budget constraints. Individuals seek to maximize their satisfaction or happiness by consuming goods and services that are on their highest possible indifference curve within their budget constraints.
One of the strengths of the ordinal school of thought is that it does not rely on the assumption of measurable utility, which is a significant criticism of the cardinal school of thought. However, a limitation of the ordinal school of thought is that it cannot explain why individuals have certain preference orderings, as it only considers the order of preferences and not the underlying reasons for those preferences.
In conclusion, the ordinal school of thought proposes that utility is not measurable on a cardinal scale and that individuals can only make meaningful comparisons between different levels of utility in terms of their preference orderings. The concept of indifference curves and the marginal rate of substitution are central to the ordinal school of thought and provide a useful framework for understanding consumer behavior and decision making.

3. The demand for productive factors, including labor, is a key determinant of pricing in the economy. The demand for labor is derived from the demand for the goods and services that labor produces. Firms hire labor because they expect to generate more revenue from the goods and services that labor produces than the cost of hiring that labor.
The demand for labor is influenced by several factors, including the productivity of labor, the price of the output produced by labor, and the price of other factors of production, such as capital. If labor is highly productive, firms will be willing to pay a higher wage to attract that labor. Similarly, if the price of the output produced by labor is high, firms will be willing to pay more for labor to produce that output.
The elasticity of demand for labor also plays a significant role in the pricing of labor. If the demand for labor is elastic, meaning that firms can substitute other factors of production for labor relatively easily, then the wage rate for labor will be lower. On the other hand, if the demand for labor is inelastic, meaning that firms cannot easily substitute other factors of production for labor, then the wage rate for labor will be higher.
In a competitive labor market, wages are determined by the intersection of the supply and demand for labor. The supply of labor is influenced by several factors, including the size of the labor force, the level of education and skills of the labor force, and government policies that affect the mobility of labor.
In a monopsony labor market, where there is only one buyer of labor, such as a single large employer in a small town, the employer has the ability to influence the wage rate by hiring less labor and paying a lower wage than in a competitive market. This is because workers have limited job opportunities, and the employer can exploit this market power to pay lower wages.
In summary, the demand for labor is derived from the demand for goods and services that labor produces and is influenced by factors such as labor productivity, the price of output, and the price of other factors of production. The elasticity of demand for labor and the level of competition in the labor market also play significant roles in determining the wage rate. Understanding these factors is crucial for firms, policymakers, and workers to make informed decisions regarding labor pricing and market participation.

1) Briefly explain the elementary theory of utility

The elementary theory of utility is a basic economic concept that attempts to explain how individuals make choices based on their preferences and constraints. According to this theory, individuals have a set of preferences over different goods and services, and they choose the combination of goods that provides them with the highest level of satisfaction or utility.

This theory assumes that individuals are rational and make choices based on their subjective preferences. It also assumes that individuals face constraints, such as budget constraints, which limit their choices. In order to maximize their utility, individuals allocate their limited resources to the goods and services that provide them with the most satisfaction, given their budget constraint.

The theory of utility is based on the concept of marginal utility, which is the additional satisfaction that an individual derives from consuming an additional unit of a good or service. According to this theory, individuals will continue to consume a good or service as long as its marginal utility is positive and will stop consuming it once its marginal utility becomes negative.

Overall, the elementary theory of utility provides a basic framework for understanding how individuals make choices and allocate their resources in order to maximize their satisfaction or utility.

2) Mention and discuss the different views of utility according to the two school of thoughts which you have been taught

In economics, utility refers to the satisfaction or happiness that an individual derives from consuming a good or service. There are two main schools of thought when it comes to utility: the cardinal school of thought and the ordinal school of thought.

The cardinal school of thought views utility as a measurable quantity that can be expressed in numerical terms, such as units of satisfaction or utils. According to this school of thought, utility is a cardinal concept that can be quantified and compared between individuals. The cardinal school of thought assumes that individuals can rank their preferences and can make precise comparisons between different goods and services.

On the other hand, the ordinal school of thought views utility as an ordinal concept, which means that it can only be ranked in order of preference, but not measured in numerical terms. According to this school of thought, utility is a subjective concept that varies from person to person and cannot be quantified or compared precisely between individuals. The ordinal school of thought assumes that individuals can only make relative comparisons between different goods and services, but not precise measurements.

Both schools of thought have their strengths and weaknesses. The cardinal school of thought provides a more precise measurement of utility, which can be useful in certain situations, such as calculating the optimal level of consumption for an individual. However, it also assumes that individuals have a perfect knowledge of their preferences and can make precise comparisons between different goods and services, which may not always be the case in reality.

The ordinal school of thought, on the other hand, acknowledges the subjective nature of utility and provides a more realistic view of how individuals make choices. It recognizes that individuals may not have a perfect knowledge of their preferences and that different individuals may have different preferences, making precise comparisons difficult. However, the ordinal school of thought does not provide a precise measurement of utility, which can make it difficult to compare the welfare of different individuals or to calculate the optimal level of consumption.

Overall, both schools of thought provide valuable insights into the concept of utility, and economists continue to debate which approach is more appropriate for different situations

3) Explain the demand for and pricing of productive factors emphasizing on the labour market

The demand for productive factors, such as labor, is derived from the demand for the goods and services that they produce. Firms demand labor in order to produce goods and services, which they can then sell to consumers. The pricing of productive factors, including labor, is determined by the forces of supply and demand in the market.

In the labor market, the demand for labor is derived from the demand for the goods and services that the labor produces. Firms will hire labor up to the point where the marginal product of labor equals the wage rate. The marginal product of labor is the additional output that is produced by hiring one additional unit of labor, while the wage rate is the price of labor. As the wage rate increases, the marginal product of labor tends to decrease, as firms will find it less profitable to hire additional workers. This creates a downward sloping demand curve for labor.

On the other hand, the supply of labor is determined by individuals who are willing and able to work. The supply of labor is positively related to the wage rate, as individuals will tend to supply more labor as the wage rate increases. This creates an upward sloping supply curve for labor.

The intersection of the demand and supply curves in the labor market determines the equilibrium wage rate and level of employment. If the wage rate is above the equilibrium level, there will be a surplus of labor, as more individuals will be willing to work at the higher wage rate than firms are willing to hire. This will put downward pressure on the wage rate, until it reaches the equilibrium level. Conversely, if the wage rate is below the equilibrium level, there will be a shortage of labor, as more firms will be willing to hire at the lower wage rate than individuals are willing to work. This will put upward pressure on the wage rate, until it reaches the equilibrium level.

In summary, the demand for labor in the labor market is derived from the demand for the goods and services that it produces. The pricing of labor, as with other productive factors, is determined by the forces of supply and demand in the market. The equilibrium wage rate and level of employment are determined by the intersection of the demand and supply curves for labor.

1• Utility theory of economic pertains to the value
or worth of a certain goods, service, or items. It
suggests that Goods, services, and items can
be ranked according to their usefulness
2a• cardinal school of thought
2b• ordinal school of thought
Cardinal school of thought: This approach emphasizes that utility is measurable. That is, after consuming a given quantity of a commodity, the consumer can simply evaluate his satisfaction through the use of figures which range from zero to infinity
Ordinal school of thought: This approach of
utility analysis requires that the consumer
should make a scale of preference and choose
between the various commodities that give him
the same level of satisfaction
3•when producing goods And services business require labour and capital as input for their production process, the demand of labour in an economic principal drive from the demand for the first output. That is if the demand for the first output increases, the firm will demand more labour thereby employing more workers but if the demand decreases the firm would have to layoff some staff

Vocational and teachincal education
department: Business education
Name: Samuel uchechi immaculate
Reg no: 2021/242870

No1 : In economic, utility theory tries to explain the behavior of individual consumers in an economy. Utility theory argues that each person, given a list of option, can rank can rank those option in a precise order of preference, it’s states that consumers make decisions based on the satisfaction they can expect to receive from an action, even when outcomes are uncertain.

2: The concept of utility can be analysed basically by the two school of thought they are
a: The ordinal school of thought
b: The cardinal school of thought

The cardinal school of thought emphasis that utility is mearsurable.This means that the quantity of goods and services that satisfies the need of a consumer can be evaluated through the use of figures ranging from zero to infinity

The ordinal requires that consumers make a scale of preference by choosing between the various commodities that gives one the same level of satisfaction.

3: it’s explain that when producing goods and services, businesses required labour and capital as input to their production.The supply and demand for labour determine the wage or price paid for labour services.If demand for a firms output increases, the firm will demand more labour, thus hiring more staff and if demand decreases, in turn, it will required less labour and it’s demand of labour will fall.

Faculty: Faculty of social sciences.
Reg no: 2021/242140.
Department: public administration and local government .
1) The elementary theory of utility is a foundational concept in economics that attempts to explain how individuals make decisions based on their preferences and constraints. The theory assumes that individuals seek to maximize their overall satisfaction or utility, and that they make choices based on the perceived benefits and costs of various alternatives. The theory also assumes that individuals have diminishing marginal utility, which means that the more of a particular good or service they consume, the less additional utility they receive from each additional unit.

2) The two schools of thought in economics, the classical and neoclassical schools, have different views on how to measure utility. In particular, they differ in their approach to measuring the intensity of an individual’s satisfaction or utility from consuming a good or service.
The classical school views utility as measurable( in utils) and quantifiable, and therefore subscribes to the concept of cardinal utility. According to this view, utility can be measured in absolute terms, such as units of satisfaction or happiness. In other words, the intensity of utility can be objectively measured and compared between different individuals.
On the other hand, the neoclassical school views utility as subjective and unmeasurable, and therefore subscribes to the concept of ordinal utility. According to this view, utility can be ranked but not measured in absolute terms. In other words, the intensity of utility cannot be objectively measured and compared between different individuals, but only ranked based on individual preferences.
Ordinal utility is based on the assumption that individuals have preferences over different bundles of goods or services, and that they are able to rank these bundles in order of preference. For example, an individual may prefer bundle A to bundle B, and prefer bundle B to bundle C. However, ordinal utility does not assign any numerical values to these preferences, and therefore cannot be used to determine the exact level of satisfaction or utility derived from each bundle.
Overall, the difference between the ordinal and cardinal schools of thought lies in their approach to measuring utility. The classical school believes in measuring utility in absolute terms using cardinal utility, while the neoclassical school believes that utility is subjective and can only be ranked using ordinal utility.

3) The demand for and pricing of productive factors, including labor, is determined by the interaction of supply and demand in the market. In the labor market, the demand for labor is determined by the marginal revenue product (MRP) of labor, which is the additional revenue generated by hiring an additional unit of labor. The supply of labor is determined by the number of individuals willing and able to work at a given wage rate. Wages will adjust until the market clears, meaning that the quantity of labor supplied equals the quantity of labor demanded. In addition, the pricing of other productive factors, such as capital and land, is also determined by supply and demand in their respective markets.

1,Briefly discuss the elementary theory of utility.

It is a theory postulated in economics that refers to the amount of satisfaction derived from the consumption of a commodity at a particular time. It seeks to explain the individuals’ observed behavior and choices. Any commodity that has the power to satisfy human wants is said to possess utility. The concept of utility was given much attention by the classical economists especially in relation to their theory of demand. It was earlier thought that utility cannot be measured in absolute units. We can now represent them analytically using a utility function—a mathematical formulation that ranks the preferences of the individual in terms of satisfaction different consumption bundles provide.

2,Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.
i. The cardinal utility school of thought.
ii. The ordinal utility school of thought.

i. The cardinal utility school of thought argues that the utility of a commodity can be measured. It is a quantitative approach to measuring utility. It presents the utility of something as a fixed number – it’s an exact measure of utility. Some economists who belong here argue that utility can be measured subjectively in units called ‘utils’ while others suggest that utility can be measured in monetary units.

ii. The ordinal utility school of thought: It is a relative measure of utility. It describes how one can determine the value of a good or service by comparing it to another. Economists belonging to this school argue that it is not possible to measure utility i.e. satisfaction. They are of the opinion that although utility cannot be precisely measured, it is possible for consumers to make choices between different bundles of commodities by ranking them according to the level of satisfaction expected from each bundle.

3,Explain the demand for and pricing of productive factors emphasizing on the labour market.

The demand for labour shows how many workers the firms are willing and able to hire at a given time and wage rate. This demand may not necessarily be in long-run equilibrium. Equilibrium in the labour market depends on the wage rate firms are willing to pay and the amount of labour willing to provide the necessary work. The law of demand applies in labour markets this way: A higher wage or salary—that is, a higher price in the labour market—leads to a decrease in the quantity of labour demanded by employers, while a lower wage leads to an increase in the quantity of labour demanded. As the quantity of other inputs decreases, the demand for labour will decrease. Similarly, if prices of other inputs fall, production will become more profitable and suppliers will demand more labour to increase production. The opposite is also true. Higher input prices lower demand for labour.

Reg. No: 2017/245818

1 utility is a term use to determine the worth or value of a good or service more specifically, utility is the satisfaction or benefits derived from consuming a good or services.
Utility theory bases it’s believe upon individuals preference.it is a theory postulated I’m economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preference. We can this state that individuals preference are intrisian any theory which proposes to get preferences is by necessity abstraction based on certain assumption. Utility theory is a positive theory that seeks to explain the individual observe behavior and choice, the difference between normative and positive aspect of a theory is very important in the discipline of economics. Some scholars argue that economics theories should be normative meaning that they should be prescriptive and tell people what to do.while some argue often successfully that economic theories are designed to explanation of observed behavior of agent in market vice positive in that aspect.
Under the assumption of utility theory, we can assume that people bahaved as if they had a utility function and acted according to it therefore, the fact that a person does not know his or her utility function or even denied it’s existence does not contradict the theory. Economics have used experiment to decipher individuals utility function and behavior that that lies individuals utility.
Individual faces a set of consumption bundles, so we assume that to have a clear preference that enable them to ‘rank order’ all bundle based on desirability that is the level of satisfaction each bundle shall provide to each individual. It ranks ordering based on preference tells as the theory itself has ordinal and cardinal utility
ASSUMPTION OF UTILITY THEORY
1COMPLETENESS: Individuals can have rank order all possible bundles, ranking ordering shows that the theory assume that no matter how many combination of consumption bundle are placed in front of individuals, Each individual can rank them in some order based on the preference this means that the individual can compare any bundle with any other bundle rank them in order of the satisfaction each bundle provide. Mathematically this property where in an individuals preference enable him or her to compare any given bundle with any other bundle is called the completeness property of preference.
2 MORE IS BETTER: in this aspect we assume that an individual prefers the consumption of bundle A of good to bundle B. And then he is offered another bundle which contains more of everything in bundle A that is the new bundle is represented by aA where a = 1. The more is better assumption says that individuals prefer aA to A itself. Mathematically the more is better assumption is called Monotonicity assumption on preference. One can argue that this assumption breaks down frequently.
3 MIX IS BETTER: we assume that the individual is indifference to the choice between one week of clothing Alone and one week of food thus choice itself is not preferred over the other.
The mix better assumption about preference says that a mix of two say half weeks of food mixed with half week of clothing will be preferred to both stand alone choice
4 RATIONALITY: this is the most important assumption that lays down all of utility theory. Under the assumption of rationality individuals preference avoid any kind of circularity.
Utility theories argues that each person give a list of options can rank those options in a precise order of preference, Each person have difference choice. In economics utility theory governs individuals decision making.
2 THE DIFFERENT VIEW OF UTILITY ACCORDING TO THE TWO SCHOOLS OF TAUGHT
A The ordinal utility
B The cardinal utility
ORDINAL UTILITY: refers to the satisfaction level after consuming any good or services cannot be scaled in numbers. However these things can be arranged in order of preference. Utility is ranked based on satisfaction, it is more practical and sensible. Whereas, these things can be arranged in order of preference. Two English economist John Hick and R.J Allen 1930 argued that the consumer behavior theory be introduced based on ordinal utility. According to the ordinal approach utility is a psychological phenomenon like happiness, welfare, and satisfaction. The ordinal theory is highly subjective and differs across individual therefore it cannot be measured in quantifiable terms the function that represents utility of a products according to it’s preference but does not provide any numerical figure is know as an ordinal utility
A consumer preference can be demonstrated graphically through indifference curves. It becomes easy when there are two types of commodities (xy) when (x1,y1) and (x2,y2). That’s on the same curve line and ( x1,y1)
This is an example of indifference curve map where the preference of goods are shown but not their quantity. The utility according to this approach can be measured in relative terms such as less than and greater than.this approach states that consume behavior can be explained in terms of preference on ranking. Utility can be ranked qualitatively rather than quantitatively
CARDINAL UTILITY
According to this concept, the utility can be expressed similarly to how weight and height are expressed, however the economics lacked a precise unit for utility, Hence the derived a psychological unit termed as util
Until is not regarded as a standard unit because it varies from person to person place to place
APPLICATION OF CARDINAL UTILITY
Welfare Economics
Marginalism
Expected utility theory
Intertemporal utility
3 Demand for and pricing of productive factors emphasizing on the labour.
What is Demand for Labor
When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.

Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.

Name: Okereke Nmasichukwu Revival
Department: Public administration and local government.
Reg no: 10494364AE
Faculty of social sciences.
1. Consumer behavior theories, which presuppose that customers will attempt to maximize their utility given the resources at their disposal, can be used to indirectly determine a consumer’s utility, even though it is relatively difficult to do so. When a customer feels satisfied after using a product or service, it can be said that the item has utility. Utility is relative to the customer and depends on time, place, form, and possession.
Types of utility
1. Time utility
2. Form utility
3. Place utility
4. Possession utility

2. The cardinal school of thought;

According to this school of thought, utility can be measured, which means that the amount of products or services needed to satisfy a consumer’s need may be calculated using numbers between zero and infinity.

The cardinal school of thinking is based on five premises.
1. The quality of the products or services affects total utility.
2. The consumer’s income in money is constant.
3. The marginal utility is diminishing.
4. The buyer is sensible.
5. Utility may be measured.

The ordinal school of thought;

According to the ordinal approach to utility, consumers must rank their preferences for diverse goods that provide us with the same amount of satisfaction. This method is predicated on the idea that utility may be graded at different degrees of consumption. An indifference curve—a curve that depicts the degrees of contentment gained by a consumer via the consumption of the commodities—is used in this strategy. A combination of indifference curves is known as an indifference map.

3. The issue of determining factor prices is satisfactorily resolved by the contemporary theory of pricing of factors of production, sometimes referred to as demand supply theory. According to the idea, the forces of supply and demand are responsible for determining the price of a commodity, just as they are responsible for determining the price of a factor of production.

Name:omeje perpetua uzoamaka
Department: public administration and local government
Martic number: 2021/242155

Question 1:utility theory rest upon the ideal that people make decision by assigning imaginary utility value to the original monetary value. In economic utility theory governs individual decision making. It is a theory postulated in economic based on the premise people can to explain behaviour of individual. It also a positive theory that seeks to explain the individual observed behaviour and choice it means that it is designed to be explanation of observed behaviour of agent in the market.
Question 2:cardinal school of taught and
Ordinal school of taught
Cardinal school of taught emphasize that utility is mensurable. It represent the absolute level of satisfaction and ranges from zero to infinity. The father of cardinal utility is Alfred Marshall.
Ordinal school of taught believes that utility cannot be measured quantitatively. It is designed to study relative satisfaction levels, it is not additive rather it could only be ranked according to preference. It argues that utility is completely a psychological element and cannot be expressed in cardinal numbers. Hicks and Allen propounded the ordinal approach of utility analysis, they are known as the neoclassical economists
Question 3: a labour market is the place where workers and employees interact with each other .the pricing of the commodity itself and the quantity demanded of the commodity have negative relationship as the price of the goods or service rises,the quantity demanded falls there by causing problems in the labour market. Demands consists of businesses that need labour based on organizational changes economic activities and industry trends. changes in the wage rate causes a movement along the demand curve. Higher labour cost reduce employment and or the hours worked by individual employees laws that raise labour cost can either increase total employment or increase hours per worker but they cannot do both.

NAME : MAZELI OJIUGO OLIVE
REG NO 2020/241171
DEPT: NURSING SCIENCE

ASSIGNMENT

1). utility theory tries to explain the behavior of individual consumers in an economy. Utility theory argues that each person, given a list of options, can rank those options in a precise order of preference. Each person has different choices which are set, not changing over.
It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences. utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisfaction or benefit derived from consuming a good or service. Utility theory in economics pertains to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness. The premise was initially theorized by Swiss mathematician, Daniel Bernoulli, in the 18th century.

2)a. Cardinal school of thought

CARDINAL SCHOOL OF THOUGHT: This approach emphasizes that utility is measurable. That is, after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which range from zero to infinity. However, cardinal utility and ordinal utility are the two predominant theories of utility. The cardinal utility believes in measuring the satisfaction level in utils and the ordinal utility believes that the satisfaction level cannot be evaluated; however, it can be levelled.

2b). Ordinal school of thought

The ordinal approach to consumer’s utility states that the utility/satisfaction cannot be measured in exact numbers but can only be ranked or put into order. This approach argues that utility/satisfaction is completely a psychological element and it cannot be expressed in cardinal numbers. In ordinal utility, the consumer only ranks choices in terms of preference but we do not give exact numerical figures for utility. For example, we prefer a BMW car to a Nissan car, but we don’t say by how much. It is argued this is more relevant in the real world.

The concept of ordinal utility states that the level of satisfaction a consumer obtains after consuming various commodities cannot be measured in numbers but can be arranged in the order of preference.

utility is the satisfaction a consumer derived from consuming a particular product at a particular time
Forms of utility
Time utility: This is the satisfaction a consumer derived from consuming a commodity at a particular point in time.
place utility: This is the satisfaction a consumer derived from consuming a commodity depending on how accessible it is.
Form utility: some commodity cannot be consumed at their original state. This is the satisfaction a consumer derived from consuming a commodity after it have been transformed
Possession utility: This is the satisfaction you derived when you own a commodity not when you borrow them.
concept of utility
There are various concept of utility
concept of total utility: This is the satisfaction a consumer derived from consuming all the unit of goods at a particular time
concept of average utility: This is the satisfaction a consumer derived from consuming a bit or per unit of a commodity at a particular time.
concept of marginal utility: This is the additional satisfaction a consumer derived from consuming an extra commodity at a particular time.

view of utility according to the two schools of thoughts.
cardinal school of thought
ordinal school of thought
cardinal school of thought: The theory of cardinal utility was applied by prof. Marshall.This explains that the satisfaction level after consuming any goods and services can be scaled in terms of countable numbers.
They believe that utility can be measured in utils.

ordinal school of thought: The theory of ordinal utility was applied by prof. J R Hicks. It explains that the satisfaction level after consuming any goods or services cannot be scaled in number. However, these things can be arranged in the order of preference.

3. The demand for labour shows how many workers the firms are willing and able to have at a given time and wage rate. Therefore, demand for labour us a concept that illustrates the amount of labour a firm is willing to employ at a particular wage rate.
factors affecting demand for labour
changes in technology
changes in product demand
changes in the number of firms
changes in the use of other factors of production.

pricing of productive factor is associated with the prices that an entrepreneur pays to avail the services rendered by the factor of production.

Name : Asogwa Cynthia chiamaka
Reg number: 2021/245886
Department: pure and industrial chemistry
Course code : Eco 101 Assignment

1. The elementary theory of utility is said to be the satisfaction that a consumer derives from consuming a commodity or service at any given time. Utility is therefore relative to a consumer and the variations among the individual or consumers depend on time , place and form.thus utility which is the capacity of a commodity or service to satisfy a human want, depends on time , place & form
( No2) These are the two theories of utility
a. CARDINAL UTILITY and
b. ORDINAL UTILITY
The different views of the above utility according to the two school of thought are ;
(a.) Cardinal school of thought: This approach emphasize that utility is measurable, that is after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which rang from zero to infinity
(b.) Ordinal school of thought; the utility/satisfaction cannot be measured in exact number,in quantitative terms but it can only be ranked or put into order. Therefore the the utility/satisfaction is completely a psychological elements and it can’t be expressed in cardinal number, rather the consumer can compare the utility occurring from different commodities.
( No 3)
The demand for and pricing of productive factor emphasizing on the labour market; The law of demand applies in labor market, A higher salary or wage that is higher price in the labour market lead to a decrease in the quantity of labor demanded by employers . while a lower salary or wage leads to an increase in the quantity of labor demanded.productive factors relates out put to the number of workers employed ,it doesn’t measure the specific contribution of labor alone.

Name: Arinze Uchechukwu Deborah
Reg no: 2020/244267
Dept: Nursing Sciences
1. Utility theory in economics pertains to the value or worth of a certain good, service or item. It suggest that goods, services and items can be ranked according to their usefulness. The premise was initially theorized by Swiss mathematician Daniel Bernoulli, in the 18th century. Bernoulli founded the idea with regard to the differing values of things with respect to the theory, the utility of an item tends to be closely correlated to it’s price. An item such as gold is regarded useful thus utility (combined with it’s scarcity) is very important. Although it’s hard to calculate the exact utility of something, Economist use abstract measurements to capture the usefulness of things.
2a. Cardinal school of thought
This was propounded by the neo-classical economist who believe that utility is measurable and the consumer can express his satisfaction in Cardinal or quantitative numbers i.e (1,2,3).
Assumptions of Cardinal school
1. Rationality
2. Limited resources (money)
3. Maximizes consumer’s satisfaction
4. Diminishing marginal utility
B. Ordinal school of thought:
This concept states that the level of satisfaction a consumer obtains after consuming various commodity cannot be measured in number but can be arranged in order preference. It functions in representing the preferences of an agent on an ordinal scale.
3. Demand for labor shows the number of workers the firms are willing and able to hire at a given time and wage rate.
For firms to demand for labor the labor productivity must be at increase , this would shift the labor demand curve outwards.

Uzoaru John Chiagoziem
Department of Public Administration And Local Government
2021/246592
1.Utility theory in economics pertains to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness. The premise was initially theorized by Swiss mathematician, Daniel Bernoulli, in the 18th century. Bernoulli founded the idea with regard to the differing values of things. With respect to theory, the utility of an item tends to be closely correlated to its price. An item such as gold, which is very useful and thus has great utility (combined with its scarcity), is very expensive. Total utility is closely tied to the bare concept of utility. Total utility points to the aggregate amount of usefulness and fruition there is to be gained from the use of a specific good, service, or other item. Furthermore, the abstract measurement of utility is another key concept of the theory. Although it’s hard to calculate the exact utility of something, economists use abstract measurements to capture the usefulness of things.

The four basic assumptions of utility theory are that a customer can rank any number of given options, more total utility is always better than less, a mix of goods is better than a set of one good, and customers are rational decision makers:

Ranking Options – An individual can rank any number of options based on their utility and the amount of satisfaction they’ll gain from each
More Total Utility is Better – For a good, service, or any other item, having more total utility is always better than having less as it points to more gratification found in the good, service, or item
Variety is Better – To have a diversified set of goods is better than to have a set of only one good. This is due to the increased usefulness found in differing goods compared to a single good
Rational Consumers – It is generally assumed that individuals are rational decision makers who’ll always make the best choice in light of utility
There are also different types of utility, such as;

Form Utility – Worth of the good or service based on the combined resources it took to create the good or service
Time Utility – The utility that is found in offering a good or service to consumers at the right time
Place Utility – Refers to offering a good or service in the right place for consumers’ easy accessibility
Possession Utility – The satisfaction a consumer gains from owning a certain product/good
2. i..Ordinal Utility states that the satisfaction a consumer gets after consuming a good or service cannot be scaled in numbers, whereas, these things can be arranged in the order of preference. Two English economists, John Hicks and R.J. Allen 1930 argued that the consumer behavior theory should be introduced based on Ordinal Utility. According to the ordinal approach, utility is a psychological phenomenon like happiness, satisfaction, and welfare. The ordinal theory is highly subjective and differs across individuals. Therefore, it cannot be measured in quantifiable terms.

The function that represents utility of a product according to its preference, but does not provide any numerical figure, is known as an Ordinal Utility. In simpler words, this theory affirms that it is relevant to ask which item is better as compared to others instead of how good is that product. For example, a BMW car is favored more than a Toyota car, but it cannot be determined by what percentage.

Apart from showing a mathematical function, a consumer’s preference can be demonstrated graphically through indifference curves. It becomes easy when there are two types of commodities x and y. Each indifference curve provides coordinates (x,y) when (x1, y1) and (x2, y2) lie on the same curve line and (x1, y1) ~ (x2, y2).

This is an example of an indifference curve map where the preference of goods are shown but not their quantity. Each of the curves represents a combination of two services or goods. The consumers are equally satisfied with the goods and services. The more distant a curve is from the origin, the higher its utility level.

The utility according to this approach can be measured in relative terms such as less than and greater than. This approach states that consumer behavior can be explained in terms of preferences or rankings. For example, a consumer may prefer soft drinks over hard drinks. In such a case, the soft drink would have 1st rank, while 2nd rank would be given to hard drinks

Therefore, as per the Ordinal Utility approach, a consumer observes different pairs of two commodities which would provide him/her the same level of satisfaction. Among these pairs, he/she may prefer one commodity over the other based on how he/she ranks them in order of utility. This implies that utility can be ranked qualitatively rather than quantitatively.

Do you know: In 1934 John Hicks and Roy Allen produced the first paper which declared Ordinal Utility.
ii…What is Cardinal Utility?
According to classical economists, utility is a quantitative concept that can be measured in terms of a number. Hence they introduced the concept of measuring utility using a cardinal approach. According to this concept, the utility can be expressed similarly to how weight and height are expressed. However, the economists lacked a precise unit for utility. Hence, they derived a psychological unit termed as ‘Util’. Util is not regarded as a standard unit because it varies from person to person, place to place, and time to time. For example, if a person assigns 30 utils to a pizza and 20 utils to a chowmein, we can understand that the pizza has double the capacity to satisfy what humans want.

As util is not a standard unit for measuring utility, many economists, including Alfred Marshall suggested measurement of utility in terms of money that consumers are willing to pay for a commodity. If each rupee is equal to 1 util, a pizza worth Rs 30 has 30 utils and a chow min worth Rs 20 has 20 utils. Hence, the consumer who consumes burgers will yield utility of 30 utils and those who consume chow min will yield utility of 20 utils.

The supply and demand of a product decide its price. Moreover, a person’s desire for a product depends on these three factors:

Price of the item

Income of a person

The cost of other related items

Application of Cardinal Utility
Following are the different applications of Cardinal Utility:

Welfare Economics: Under this structure, the production of goods and providing services are judged by the personal wealth of an individual. This means that it presents a way to comprehend the “greatest good to the greatest number of persons”. For example, by this act, a person’s utility decreases by 75 utils and increases two other persons each by 50 utils. However, the overall increase is 25 utils which is a positive offering.

Marginalism: In cardinal theory, a product’s marginal utility sign is alike for all the mathematical forms, but its magnitude is not the same. This applies to the second derivative of a differentiable utility as well.

Expected Utility Theory: This framework works for settlements that are to be made under risks. Suppose there are a few lottery tickets that will provide outcomes. Here, it is possible to plot preferences in real numbers so that numerical representation can be done.

Intertemporal Utility: In various representations of utility, where people deduct the upcoming values of utility, cardinality comes into play. With the use of this, it is feasible to generate proper utility functions.
3.Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.

A profit-maximizing entity will command additional units of labor according to the marginal decision rule: If the extra output that is produced by hiring one more unit of labor adds more to total revenue than it adds to the total cost, the firm will increase profit by increasing its use of labor. It will continue to hire more and more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor. This relationship is also called the marginal product of labor (MPL) in the economics community.

Other Considerations in Demand for Labor
According to the law of diminishing marginal returns, by definition, in most sectors, eventually the MPL will decrease. Based on this law: as units of one input are added (with all other inputs held constant) a point will be reached where the resulting additions to output will begin to decrease; that is marginal product will decline.

Another consideration is the marginal revenue product of labor (MRPL), which is the change in revenue that results from employing an additional unit of labor, holding all other inputs constant. This can be used to determine the optimal number of workers to employ at a given market wage rate. According to economic theory, profit-maximizing firms will hire workers up to the point where the marginal revenue product is equal to the wage rate because it is not efficient for a firm to pay its workers more than it will earn in revenues from their labor.

1.What Is Utility?
In economics, utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisfaction or benefit derived from consuming a good or service. Economic theories based on rational choice usually assume that consumers will strive to maximize their utility.

The economic utility of a good or service is important to understand because it directly influences the demand, and therefore price, of that good or service. In practice, a consumer’s utility is usually impossible to measure or quantify. However, some economists believe that they can indirectly estimate what is the utility of an economic good or service by employing various models.Understanding Utility
The utility definition in economics is derived from the concept of usefulness. An economic good yields utility to the extent to which it’s useful for satisfying a consumer’s want or need.
1
Various schools of thought differ as to how to model economic utility and measure the usefulness of a good or service.Utility in economics was first coined by the noted 18th-century Swiss mathematician Daniel Bernoulli.
2
Since then, economic theory has progressed, leading to various types of economic utility.

Ordinal Utility
Early economists of the Spanish Scholastic tradition of the 1300s and 1400s described the economic value of goods as deriving directly from this property of usefulness and based their theories on prices and monetary exchanges.
This conception of utility was not quantified, but a qualitative property of an economic good.
3
Later economists, particularly those of the Austrian School, developed this idea into an ordinal theory of utility, or the idea that individuals could order or rank the usefulness of various discrete units of economic goods.
4

Austrian economist Carl Menger, in a discovery known as the marginal revolution, used this type of framework to help him resolve the diamond-water paradox that had vexed many previous economists. Because the first available units of any economic good will be put to the most highly valued uses, and subsequent units go to lower-valued uses, this ordinal theory of utility is useful for explaining the law of diminishing marginal utility and fundamental economic laws of supply and demand.
5

Cardinal Utility
To Bernoulli and other economists, utility is modeled as a quantifiable or cardinal property of the economic goods that a person consumes.
2
To help with this quantitative measurement of satisfaction, economists assume a unit known as a “util” to represent the amount of psychological satisfaction a specific good or service generates for a subset of people in various situations.
5
The concept of a measurable util makes it possible to treat economic theory and relationships using mathematical symbols and calculations.

However, it separates the theory of economic utility from actual observation and experience, since “utils” cannot actually be observed, measured, or compared between different economic goods or between individuals.
6

If, for example, an individual judges that a piece of pizza will yield 10 utils and that a bowl of pasta will yield 12 utils, that individual will know that eating the pasta will be more satisfying. For the producers of pizza and pasta, knowing that the average bowl of pasta will yield two additional utils will help them price pasta slightly higher than pizza.

Additionally, utils can decrease as the number of products or services consumed increases. The first slice of pizza may yield 10 utils, but as more pizza is consumed, the utils may decrease as people become full. This process will help consumers understand how to maximize their utility by allocating their money between multiple types of goods and services as well as help companies understand how to structure tiered pricing.

Economic utility can be estimated by observing a consumer’s choice between similar products. However, measuring utility becomes challenging as more variables or differences are present between the choices.

2.In Plato’s Republics and in his other writings we see a development of idealism. According to him, every object of our experience is nothing but shadow. That is saying that it is not in a pure state of reality. Whatever we perceive is merely a poor copy of the reality that exists in another world which he designates as the world of Forms or Ideas. Thus Plato’s Idealism talks of two worlds: the world of shadows and the world of Ideas. The latter is replete with absolute perfection, real, unchangeable, universal and eternal realities whereas the former is the world of imperfect copies of things residing in the real world of ideas. The implication is that every material thing must have its true copy in the world of ideas. Idealist would say that even the pen you are having now is only an imperfect copy or a shadow of the ideal pen in the world Ideas. Though there may ne various strands of idealism, the basic tenet is the emphasis that existence is explained in terms of the mind and its function.

Other Views on Idealism

Since Plato, there have been many understanding of idealism. Descartes is one such Idealist. He holds that the most important element in the nature of knowledge is mind or spirit. This idea is beautifully expressed in his popular philosophical dictum. Corgito ergo sum (I think, therefore I exist). This idealistic statement has so much implication for Descartes who doubted the reality of anything having material nature and would only accept as reality the thought that he is thinking. Bishop George Berkeley also advanced the school of idealism in modern times by his esse est percipi (to be is to be perceived) . What is real is that which can be perceived, what cannot be perceived is unreal.

To put it more correctly again, the central thesis of idealism is that true knowledge can be derived from reason alone since it is only the faculty of reason that can grasp or extract from material things their spiritual forms or essences. The faculty of the senses provides the mind with imperfect, unstable and changing knowledge of physical objects.

Educational Implication of Idealism

1. For Plato, Education simply means stimulation of the mind to recall that which it already knows before its being in the world. He taught that the soul I born with innate knowledge which it lost with contact with the material world (human body). Thus the concept of school and education is to create an enabling environment where students are encouraged to recall and embrace the concept of the Good and the universal truth that already exist in their soul which has been forgotten. An idealistic educational system would concern itself with ideas of things. The goal of education should be connected with the lifetime work of searching for true ideas. It should be to cultivate the human mind.

2. Idealism prefers the world of the spiritual to the world of material things. Thus, in education, effort is made to create an enabling environment for the orientation of the youngster towards spiritual things or toward ideas.

3. As a result of the basic tenet of Idealism, educational curriculum is made of humanities (languages, literature, philosophy, religion, etc) and social studies. These subject are idea-based. Thus they are to awaken in students the basic ideas of the universe. They help in the cultivation of the mind. Not that idealist do not consider physical training, vocational training and sciences, they consider them but only in the subordinate manner.

Realism

Realism as a philosophy is traceable to Aristotle, the famous student of Plato, (384-322 BC). He is acclaimed to be the father of realism just as Plato is believed to be the propounder of idealistic tradition in Western Philosophy.

The contention of Realism is that objects of our sensual perceptions are real in themselves, whether the mind perceives it or know it or not. The basic tenet of realism is that reality and knowledge of things can be acquires independent of the mind that perceives them. In other words reality is extramentasl and not intramental, i.e. it exists outside the mind and not within the mind as ideas. The implication of the realist epistemology is that everyday experience is true knowledge. “Our dependable knowledge if external reality is possible. Physical reality asserts, as fact, that the actual sticks, stones and trees of the universe exist whether or not there is a human mind to perceive them”. Ozmon & Craver (1995). “The realist prioritizes a worl of ‘things; as opposed to a world of idea Jacobsen, (1842-1910).

Some of the proponents of Realism are Baruch Spinoza (1632-1677), John Locke (1632-1704), American Philosopher-Psychologist, William James, (1842-1910), etc.

Realism is antithetical to Idealism. It upholds that the view that matter is real and not shadows or “copies” of the real which exist in the spiritual/immaterial world. In its proposition, realism says that our concrete materials world is capable of furnishing human mind with reality. And these realities are independent of the perceiving mind. It is in opposition to \berkeleyan theory of esse est percipi (to be is to be perceived) which virtually equares existence with perception such that an object cannot be said to exist if there is no body or some ‘mind’ to perceive it. Agudosi (2033:58)

Realism is like an umbrella term that covers many other philosophies which can be said to be sub-schools of realism. These sub-schools believe that reality is perceptible, concrete and outside the mind. Thus we have the following ‘Realisms’.

1. Aristotelian Realism

2. Scholastic Realism

3. Natural or Scientific Realism

Aristotelian Realism: This is also known as classical realism because it is the premier realism of western culture. As the name suggests, it is an intellectual product of Aristotle. He was a student of Plato, but disagreed with his master on what is the nature of human knowledge. Do we actually perceive things the way they are, or do we perceive them as they appear to us? That is to ask if the concrete data of our experiences are real or imaginary? That is why he wrote on almost all the fields of human knowledge: poetry, rhetoric, ethics, politics, meteorology, embryology, physics, mathematics, metaphysics, anatomy, physiology, logic, dreams and so forth.

“Aristotle viewed reality as a uniting of both actuality (form) and potentiality (matter). Both must be united in order for something to be real or to truly exist”, and that is the principle of his Aristotelian Hylemorphism. All things are made of matter. What makes one matter different from another? It is the form (morphe), the differentiating or the individuating principle of matter. It is evident that every object of our daily experience is made up of matter and form and it is this co-existence of matter and form in reality that Aristotle designates as Hylemorphism. It is then the form that make something what it is, as against or different from what is not. When both matter and form are not present, knowledge is not possible.

Aristotle described the relationship between form and matter with the Four Causes:

Material cause – the matter from which something is made;
Formal cause – the design that shapes the materials object;
Efficient cause – the agent that produces the object; and
Final cause – the direction toward which the object is tending.
Through these different forms, Aristotle demonstrated that matter was constantly in a process of change. He believed that God, the Ultimate Reality held all creation together. Organization was very important in Aristotle’s philosophy. He maintained that human beings as rational creatures are fulfilling their purpose when they think, and thinking are their highest characteristic.

Furthermore, realism unlike idealism does not talk about dual world of matter and form in order to explain human knowledge. For realists, there is only “a world” of reality.

Educational Implications of Realism

1. Religious realists do not limit knowledge to the phenomenal world alone, but hold that knowledge acquired through the senses is real; rational knowledge does not form the entire domain of reality. There is a being responsible for their existence. The cosmos are real, and they point to the existence of a higher Being. Furthermore, the study of God reveals that man always depends on God for his perfection and self-fulfillment. Therefore, education must recognize and incorporate this fact. Okafor (1981) writes that this is the basic educational task of scholastics. “The two domains (the natural and the supernatural) are complimentary elements in man’s effort towards the attainment of his ultimate self-fulfillment and complete actualization”.

2. The scientific realism sees the environment and the training of the senses for perception as against empty memorization of abstract things. It is a total rejection of the classical method whereby the child is made to memorizing knowledge by rote system. The child is given enormous freedom to discover knowledge and is given freedom to think through situations rather than accepting authority as source of human knowledge. One major criterion for knowledge here is the inductive method of observation, experimentation, formulation of hypothesis and laws which eventually form what is known today as scientific knowledge. This implies that nay knowledge that cannot be verified inductively is committed to the flames, and more so are dogmas. Education is better dome God-free.

Appreciable is the influence of Scientific knowledge to life. It has actually advanced the welfare of man in the society. But care must be taken not to reduce life to what can be tested, evaluated and decided in the laboratory. Life is always larger than scientific logic.

3.When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.

Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.

BREAKING DOWN Demand for Labor
Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.

1) The main hypothesis in the theory of decision is that the person who is in the position of deciding is entitled to the “economic man”. Also, the individual acts rationally. Utility is the ability to satisfy ( eliminate) human needs of goods and services. Utility is basically a psychological concept and also is the basis of economics and finance. Three types of utility takes place in the economics and finance literature. Expected benefit theory assumes that people choose risky or uncertain opportunities by comparing the expected benefits for them. Allais and Ellsberg paradoes criticize expected utility theory. Tversky and Kahneman (econometrics; 47: 263-291, 1979) present that the expected utility axioms are violated for more reasonable lottery alternatives than in the Allais paradox and put a link between finance and psychology.
2) cardinal utility: Bentham (1789) assumes that the value defined as “utility” can be measured numerically (cardinal). According to Bentham, a standard utility scale that can be applied to all people can be developed.
*) Ordinal utility: ordinal utility theory assumes that benefit is an immeasurable magnitude.
3)The demand for labour is an economics principle derived from the demand for a firm’s output. That’s if demand for a firm’s output increases, the firm will demand more labour, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labour and its demand for labour will fall, and less staff will be retained.
*)Labour market factors drive the supply and demand for labour. Those seeking for jobs will supply their labour in exchange for wages. Businesses demanding labour from workers will pay for their time and skills.

Name:Nwagugu Chinwendu Emmanuel (External Student)
Reg no:2016/239717
Email:nwaguguemmanuella@gmail.com

1. Theory of Utility: Utility may be defined as the ability of a commodity or service to satisfy consumers wants. Therefore when a consumer derives satisfaction from the consumption of any commodity or service, it can be said that commodity or service possesses utility. In other words, any commodity or service that possesses utility is useful to the consumer that used it. As a result of the fact that usefulness is a relative term, therefore, what may be useful to one person may not be to another. Utility therefore, is relative to a consumer depending on the time, place, form, nd possession etc.

2
a. Cardinal school of thoughts: The approach emphasizes that utility is measurable. That is after consuming a given quantity of a commodity the consumer can aim or calculate his satisfaction through the use of figures which range from 0 to infinity. Some economists who belong to this school of thought argue that utility can be measured subjectively in units called “Utils”. The assumptions of the cardinal approach are;
I. Utility is measurable
ii. The consumer is rational.
iii. There is diminishing marginal utility.
iv. Total utility (TU) depends on the quantity consumed.
v. Money income of the consumer is held constant.

b. Ordinal school of thoughts: Economist who belong to this school argue that it is not possible to measure utility (satisfaction). They opine that although utility cannot be precisely measured, it is possible for a consumer to make a choice between various bundles of commodities by ranking them according to the level of satisfaction expected from each bundle without specifying exact units of utility. The ordinal approach is based on the following assumptions:
I. Total utility is determined by the quantities of commodities consumed.
ii. Rationality of the consumer. He is rational because he considers the implications of his economics choices.
iii. Utility order. The consumer can rank is preferences based on expected level of satisfaction.
iv. Preferences of consumers can be ranked in terms of indifference curves which cannot the marginal rate of substitution of commodities.

3. Explain the demand for and pricing of productive factors emphasizing on the labour market.
Ans: Labour market like other goods market in the economy are governed by the forces of demand and supply. The supply and demand for labour determine the wage or price paid for labour services. Like all prices, the price of labour (the wage) depends on supply and demand. The demand curve reflects the value of marginal product of labour.

Name: Depuun Jessica Doose
Reg no: 2021/241953
Faculty: Social Science
Department: Economics
Email: jessicadepuun@gmail.com

1.THE ELEMENTARY THEORY OF UTILITY

Utility theory: In economics, this pertains to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness. The premise was initially theorized by Swiss mathematician, Daniel Bernoulli, in the 18th century. Bernoulli founded the idea with regard to the differing values of things. With respect to theory, the utility of an item tends to be closely correlated to its price

Utility theory bases its beliefs upon individuals’ preferences. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences. Each individual will show different preferences, which appear to be hard-wired within each individual. We can thus state that individuals’ preferences are intrinsic. Any theory, which proposes to capture preferences, is, by necessity, abstraction based on certain assumptions. Utility theory is a positive theory that seeks to explain the individuals’ observed behavior and choices.

2a. Cardinal School of thought.
2b. Ordinal School of thought.

2a.CARDINAL SCHOOL OF THOUGHT:

This approach emphasizes that utility is measurable. That is, after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which range from zero to infinity.

ASSUMPTIONS OF CARDINAL APPROACH

i.Utility is measurable.
ii.The consumer is rational.
iii.There is diminishing marginal utility.
iv.Total utility (TU) depends on the quantity consumed.
v.Money income of the consumer is held constant

2b.ORDINAL SCHOOL OF THOUGHT:

In ordinal utility, the consumer only ranks choices in terms of preference but we do not give exact numerical figures for utility.
For example, we prefer a BMW car to a Nissan car, but we don’t say by how much.

It is argued this is more relevant in the real world. When deciding where to go for lunch, we may just decide I prefer an Italian restaurant to Chinese. We don’t calculate the exact levels of utility.
Carl Menger, an Austrian economist, developed concepts of utility which rested on ranked preferences.

3. DEMAND FOR A FACTOR OF PRODUCTION:
The price of a factor of production is determined by the demand for that factor and its supply.
The demand for a factor is not a direct demand but it is an indirect or derived demand. The demand for labour, for example, is not demand for labour himself. It is in fact, demand for goods or services which the labour produces. Thus when demand for goods increases, the demand for the labour which produces those goods would also rise. If demand for goods is elastic, the demand for labour would also be elastic. Similarly when demand for goods is inelastic, the labour which produces it will also be inelastic. The demand for labour also depends upon the availability of other factors which co-operate with labour in the process of production. Normally the demand for and price of labour will be higher if the co-operating factors are available in large. A third rule regarding the demand for labour is that when more of a factor is employed, its marginal productivity is likely to fall and hence its demand and price are also likely to become lower. The demand and price of labour also depends upon the market price of the goods for the production of which this factor has been used. If the goods are being sold at high prices the demand for labour would also be higher.

Ossai charity chidiebere
2020/243517
Science Laboratory and Technology.

Question 1.
Utility can be defined as the total value or satisfaction a consumer derives from purchasing and using a particular product or service.
The theory of utility explains the behavior of individual consumers, the theory argues that each person when given a list of options can rank it in his/her order of preference. A consumer that enjoys eating cake and bread but will always choose cake when placed side by side with bread, this shows that he derives more satisfaction (utility) from consuming the cake compared to bread.
The utility theory rely on a few assumptions about customers
*. It assumes that consumers rank any number of options in order of preference, and the options don’t have to be related.
*. It assumes that more utility is good, because a consumer will always go for that good that gives him/her the most utility.
*. Utility also assumes that a mix of goods is better. For example if a consumer likes cake and bread roughly on the same level, he would choose to mix the two products when asked to choose between two cakes or bread because he would get higher satisfaction by taking one of each good.
*. Utility theory replies on rational decision making, for instance, if a consumer prefers Milo to bournvita and bournvita to Ovaltine, you can not say that he would prefer Ovaltine to Milo because Milo is the first on his preference list and has the most utility, and sometimes consumers preference are fixed.
Question 2.
Cardinal utility and Ordinal utility are the two predominant theories of utility.
*. Cardinal utility— this theory of utility was formulated by the Neo-classical economists, to them utility is measurable and can be measured quantitatively/cardinaly i.e 1,2,3 etc.
The Neo-classicals coined the term ‘util’ which means unit of utility. With the passage of time, people have come to realize that cardinal measurement of utility is not possible, it is less realistic.
*. Ordinal utility— this theory was propounded by the mordern economists, J.R. Hicks and R.G.D. Allen. This theory states that it is not possible for consumers to express the satisfaction derived from the use of a commodity in numerical terms.
The mordern economists believes that utility is a psychological phenomenon but a person can introspectively say wether a good or service provides more, less or equal satisfaction when compared to one another. To these economists, the measurement of utility is ordinal, based on the ranking of preference for commodities.

Name:Justin Ikwueze Kelechi
Course:Eco 101
Faculty : Social science
Department: Public administration and Local Government
Matric Number:2021/244757

1.The elementary theory of utility is a basic framework used to explain how individuals make choices about consuming goods and services. The theory is based on the assumption that individuals have preferences over the goods and services they consume, and they make choices that maximize their overall level of satisfaction or happiness.
The theory proposes that individuals can rank their preferences for different goods and services, and they choose the combination of goods and services that provides the highest level of utility given their budget constraint. The budget constraint represents the limited amount of income an individual has to spend on goods and services.
The elementary theory of utility also introduces the concept of marginal utility, which is the additional satisfaction or happiness an individual derives from consuming an additional unit of a good or service. The theory suggests that individuals will continue to consume additional units of a good or service as long as the marginal utility exceeds the price of the good or service.
However, the theory also recognizes the concept of diminishing marginal utility, which suggests that the additional satisfaction or happiness derived from consuming an additional unit of a good or service decreases as more units are consumed. This means that as an individual consumes more of a good or service, the marginal utility of each additional unit decreases.
Overall, the elementary theory of utility provides a basic framework for understanding how individuals make choices about consuming goods and services. It emphasizes the importance of preferences, budget constraints, and marginal utility in the decision-making process. The theory forms the foundation for more advanced theories of utility, such as the cardinal and ordinal schools of thought.

2 The cardinal school of thought is a philosophical theory that emphasizes the importance of cardinal numbers in understanding the nature of reality. This school of thought is primarily associated with the work of the 19th-century German philosopher Georg Cantor.
Cantor’s main contribution to mathematics was his development of set theory, which involved the use of cardinal numbers to describe the size of infinite sets. In his view, the cardinality of a set was not dependent on its elements, but on the number of elements it contained. He argued that there were different levels of infinity, and that some infinite sets were larger than others.
This idea was revolutionary at the time, as it challenged the prevailing notion that all infinite sets were essentially the same. It also had important implications for other areas of mathematics, such as calculus and analysis.
The cardinal school of thought also had broader philosophical implications. Cantor believed that his work on set theory provided a foundation for a new kind of metaphysics, which he called “transfinite philosophy.” This philosophy held that there were infinitely many levels of reality, and that each level could be characterized by a different cardinal number.
Some critics of the cardinal school of thought have argued that it relies too heavily on abstract mathematical concepts, and that it does not provide a meaningful way to understand the physical world. Others have suggested that Cantor’s work has led to paradoxes and inconsistencies in mathematics, such as the famous paradox of the set of all sets that do not contain themselves.
Despite these criticisms, the cardinal school of thought has had a profound impact on mathematics and philosophy. It has inspired new avenues of research into the nature of infinity, and has challenged long-held assumptions about the limits of human knowledge.

The ordinal school of thought is a philosophical theory that emphasizes the importance of ordinal numbers in understanding the nature of reality. This school of thought is also associated with the work of Georg Cantor, who developed both the cardinal and ordinal approaches to set theory.
Unlike the cardinal school of thought, which emphasizes the size of sets, the ordinal school of thought focuses on the order or arrangement of elements within a set. In this view, the ordinal number of a set is a measure of its order type or structure, rather than its size.
Cantor’s work on ordinal numbers led him to the discovery of the uncountability of certain sets, such as the set of real numbers. This result had important implications for both mathematics and philosophy, as it challenged the view that all sets could be put into a one-to-one correspondence with the natural numbers.
The ordinal school of thought has also had broader philosophical implications. It has been used to explore questions about the nature of time, causation, and change, and has inspired new approaches to metaphysics and ontology.
One of the key criticisms of the ordinal school of thought is that it is even more abstract than the cardinal approach, and that it is difficult to see how it has any relevance to the physical world. However, proponents of the ordinal approach argue that it provides a powerful tool for understanding complex structures and relationships, both in mathematics and beyond.
Overall, the ordinal school of thought represents an important development in the history of mathematics and philosophy. While it may not provide a complete answer to all the big questions of existence, it has opened up new avenues of inquiry and challenged our assumptions about the nature of reality.

3. The demand for productive factors, including labor, is driven by firms’ production decisions. Firms aim to maximize their profits, which requires them to produce output at the lowest possible cost. In making production decisions, firms will consider the price of the various productive factors, including labor.
The labor market is a specific market where workers and firms interact to determine the wage rate and level of employment. In a competitive labor market, the wage rate is determined by the intersection of labor supply and labor demand. The labor supply curve represents the willingness of workers to work at different wage rates. The labor demand curve represents the willingness of firms to hire workers at different wage rates.
As the wage rate increases, the quantity of labor supplied by workers also increases, while the quantity of labor demanded by firms decreases. At the intersection of the labor supply and demand curves, the wage rate is in equilibrium, and the quantity of labor supplied is equal to the quantity of labor demanded. This is the market-clearing wage rate and employment level.
Firms will demand labor up to the point where the marginal revenue product of labor (MRPL) equals the wage rate. The MRPL represents the additional revenue generated by an additional unit of labor. If the wage rate is below the MRPL, then firms can increase their profits by hiring more workers. If the wage rate is above the MRPL, then firms will reduce the quantity of labor demanded, as the cost of hiring additional workers is too high.
In determining the wage rate, firms will also consider the elasticity of labor supply and labor demand. If the labor supply is highly elastic, then firms will have less bargaining power, and the wage rate will be lower. If the labor demand is highly elastic, then firms will have more bargaining power, and the wage rate will be higher.
Overall, the pricing of labor and other productive factors is driven by the forces of supply and demand. In a competitive market, firms will demand labor up to the point where the MRPL equals the wage rate, while workers will supply labor up to the point where the wage rate is equal to their opportunity cost. The wage rate will then be determined by the intersection of labor supply and demand, taking into account the elasticity of both curves.

Name: Agbo Loveth Ifunanya
Department: Nursing science
Reg No: 2020/247996
Email Address: agbolovethifunanya@gmail.com

Q1;
Briefly discuss the elementary theory of utility

Definition of Utility; it is the total satisfaction a consumer derive from consumption of goods and services.
Utility theory states that consumers make decisions based on the satisfaction they can expect to receive from an action, even when outcomes are uncertain

Utility theory relies on a few assumptions about consumers and their behavior:
1; people can rank any number of options in exact order of preference. The options need not be related, and there is no limit to the number of options that the consumer can rank.

2; more total utility is always better. If Bundle A produces 10 units of utility, and Bundle B produces 11 units of utility, the individual will always be better off with Bundle B.

3; A mix of goods is better. If a consumer values two items roughly equally, then a combination of the two offers more expected utility. For example, a consumer who considers hot dogs and hamburgers roughly equal would choose to receive one of each over two hotdogs or two hamburgers.

4; Utility theory relies on rational decision making. If a consumer prefers product X to product Y and product Y to product Z, then there is no time that the decision-maker will prefer product Z to product X. In other words, the individual’s preferences are fixed and don’t change.

Utility theory can explain why consumers behave the way they do and make the purchases they make.

Q2;
Mention and discuss the different views of utility according to the two schools of thoughts which you have been thought.

The two schools of thoughts are Cardinal school of thought and Ordinal school of thought

CARDINAL SCHOOL OF THOUGHT:

This approach emphasizes that utility is measurable. That is, after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which range from zero to infinity.

ASSUMPTIONS OF CARDINAL APPROACH

i. Utility is measurable
ii. The consumer is rational

iii. There is diminishing marginal utility

iv. Total utility (TU) depends on the quantity consumed.

v. Money income of the consumer is held constant

ORDINAL SCHOOL OF THOUGHT:

It states that the utility/satisfaction cannot be measured in exact numbers but can only be ranked or put into order or preference.

Assumptions of Ordinal Utility Analysis

Rationality of Consumer

This analysis assumes the rational consumers whose objective is to maximize the utility under the budget constraint.

Ordinal Measurement

The utility is measured ordinally by comparing the satisfaction whether higher or lower by consuming different bundles of goods. It is sufficient that the consumer expresses his/her preference for the various bundles of goods commodities. It is not obligatory to undertake that utility is quantitively quantifiable.

Transitivity

According to this assumption, when there are three goods A, B, and C and if the consumer chooses as A > B, B > C, then A > C. It is acknowledged as transitivity in preference.

Consistency

As per this assumption, the consumer remains consistent in choice. If there are two goods A and B then A is preferred over B i.e. A > B. At the same time B cannot be preferred over A. i.e. B A. It is called consistency in choice.

Non- satiety

The consumer always prefers moreover less if there is a choice available to him. It means the consumer has not reached to point of saturation in case of any commodity such condition is called non-satiety.

Diminishing Marginal Rate of Substitution (DMRS)

Under this theory, the marginal rate of substitution between two goods always diminishes so that a consumer can attain the same level of satisfaction. It is given by ΔY/ΔX in the case of two goods X and Y and it tells the rate of substituting commodity X to get one more unit of commodity Y.

Q3
Explain the demand for and pricing of productive factors emphasing on the labour market

The demand for productive factors, including labor, is influenced by the level of output that firms aim to produce and sell in the market. The pricing of productive factors, including labor, is determined by the intersection of the supply and demand curves for the factor.

In the labor market, the demand for labor is derived from the demand for the goods and services produced by firms. As firms increase their production, they require more workers, leading to an increase in the demand for labor. The demand for labor is also influenced by the productivity of workers and the cost of other factors of production, such as capital.

The supply of labor, on the other hand, is influenced by factors such as population growth, participation rates, and the availability of alternative forms of income. As the supply of labor increases, the equilibrium wage rate will decrease, assuming that the demand for labor remains constant. Conversely, if the demand for labor increases while the supply remains constant, the equilibrium wage rate will increase.

The pricing of labor is determined by the intersection of the supply and demand curves for labor. When the demand for labor exceeds the supply, the equilibrium wage rate will increase, and vice versa. Factors such as changes in technology, government policies, and global economic conditions can influence the supply and demand for labor, thereby affecting the wage rate.

In summary, the demand for and pricing of productive factors, including labor, are influenced by a range of economic factors. Understanding the dynamics of the labor market is crucial for policymakers, businesses, and individuals seeking to maximize their productivity and earnings.

(1a)Understanding Utility
The utility definition in economics is derived from the concept of usefulness. An economic good yields utility to the extent to which it’s useful for satisfying a consumer’s want or need.
1
Various schools of thought differ as to how to model economic utility and measure the usefulness of a good or service.
(b)Marginal Utility
Marginal utility (MU) is defined as the additional (cardinal) utility gained from the consumption of one additional unit of a good or service or the additional (ordinal) use that a person has for an additional unit.
(C)Total Utility
If utility in economics is cardinal and measurable, the total utility (TU) is defined as the sum of the satisfaction that a person can receive from the consumption of all units of a specific product or service.
1
Using the example above, if a person can only consume three slices of pizza and the first slice of pizza consumed yields ten utils, the second slice of pizza consumed yields eight utils, and the third slice yields two utils, the total utility of pizza would be twenty utils.
(2)EXISTENTIALISM
Existentialism is a school of philosophy 
 that “focuses on the 
importance of the individual rather than on external standards” (Johnson et. al., 2011, p. 93). Existentialists believe that our reality is made up of nothing more than our lived experiences, therefore our final realities reside within each of us as individuals. As such, 
 the physical world has no real meaning outside our human 
 experience.
(b)IDEALISM
Idealism is a school of philosophy that emphasizes that “ideas or concepts are the essence of all that is worth know- ing” (Johnson et. al., 2011, p. 87). Based on the writings of Plato, this school of philosophy encourages conscious reason- ing in the mind. Furthermore, idealists look for, and value, universal or absolute truths and ideas. Consequently, idealists believe that ideas should remain constant throughout the
(3)When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.

Name: Ozor Ugonna Abigail
Faculty: Vocational and Technical Education
Department: Business Education
Reg no: 10386280IC
Date : March, 2023
Assignment
No. 1 Briefly discuss the elementary theory of utility
Answer: Utility is the total satisfaction or benefit deru Ed from consuming a good or service.
Utility theory is based on the fact that satisfaction which the consumer derived from consuming goods and services can be measured quantitatively. It also partains to the value or worth of a certain good, services or items and also suggets that items should be ranked according to their usefulness. It seems to explain the individual behavior and choices.
No. 2 Mention and discuss the different views of utility according to the two school of thoughts which have been taught.
Answer: The two school of thoughts are Cardinal and Ordinal school of thoughts
a. Cardinal school of thought: This explains that the satisfaction level after consuming any good or service can be scaled in terms of countable numbers.E.g; Pizza gives Sam 60 utils of satisfaction whereas burger gives him only 40 utils. In this school of thought utility I’d measured based on utils and it is less practical. This theory was applied by Professor Alfred Marshall. It’s limitation is that it is applied to a single commodity where the utility of that commodity is treated independently of the other commodities. Another name for it is utility analysis.
b. Ordinal school of thought: It explains that satisfaction level after consuming any goods or service cannot be scaled on numbers. E.g; Sam gets more satisfaction from a pizza as compared to that of a burger. In this school of thought, utility is ranked based on satisfaction. It is more practical and sensible. It was applied by Professor J.R. Hicks. Another name for it is inference curve analysis.
No. 3 Explain the demand for and pricing of productive factors emphasising on the labour market.
Answer: The demand for labour shows the number of workers the firms are willing and able to hire at a given time and wage rate. If labour productivity increases, firms will demand more labour at each wage rate and the firms demand for labour its lf will increase. The marginal output increases as the price output increases, firms will demand more labour when outputs price gets higher. Productivity increase will lead to increase in the demand for labour.
The productivity of labour measures the hourly output of a country’s economy. It is largely driven by investment in capital, technological progress, and human capital development. The government can increase labour productivity of workers by direct investing in or creating incentives for increases in technology and human or physical capital.

1 The elementary theory of utilityThe concept of
utility refers to the descriptionwhichbis the
ability of goods and services to satisfy
unlimited human wants.The concept of utility
also refers to the expression of consumer’s
tastes and preferences which is perceived as
an essential factor in determining the level of
satisfaction to be obtained.Consumer
behaviour theories are indirectly used to
determine consumer utility because it’s
relatively difficult to measure the utility of a
consumer.The theory assumes that the
available resources at our disposal will help the
consumers to strive to maximize their
utility.The goods and services utilized by a
consumer possess utility relative to the
consumer depending on time,place,form and
possession.

2 Views of utility according to school of thought

a Cardinal school of thought: capitalizes on the
fact that utility can be calculated with the use
of figures.The assumption are as follows:

Total utility depends on quality of goods and
services.
Diminishing utility exists
Marginal utility is measurable
Income of the consumer is held constant.
The consumer is rational.
These assumptions are gotten from the
concept of total utility,average utility,and
marginal utility.

b Ordinal school of thought:The ordinal approach
assumes that utility can be ranked at various
consumption levels hence adoption of a scale
of preference between various goods and
services equally satisfying a consumer
ensues.This approach makes use of an i
indifference curve ie a curve indicating levels o
of satisfaction by the consumer from
consuming different goods and services .A
combination of an indifference curve is an
indifference map.

3 Demand for pricing of productive factors
emphasizing on the labour market

The demand and supply theory states 5hat the
commodity price is determined by the forces
of demand and supply.This concept is also
replicated in the factors of production.The
demand.for a factor is not a direct demand but
indirect or derived demand.The demand for
labour is not necessarily demand for labour but
demand for goods and services that labour
produces.If demand for goods and services
rise,the demand for factors of production also
rise.This behaviour is also same if it’s elastic or
inelastic.That is today that they are directly
proportional.Butt when more a factor is
employed ,the marginal productivity is likely to
fall and hence the demand and price gets
lower.The demand and price of a factor also
depends on the market price of the goods for
the production at which the factor is used.

Name: Ene Favour Soromkelechukwu
Reg No: 2021/243016
Email: enefavoursoromkelechukwu@gmail.com
Dept: Nursing Science

1. Theory of utility:
Utility is the amount of satisfaction that a consumer derives from the consuming a commodity at a particular time. Utility differs from usefulness because a commodity may be useful but does not satisfy an individual’s want. It differs from one individual to the other and is dependent on the time of consumption.There are four basic types of utility; time, form, place, and possession utility.

2. Cardinal School of Thought: It emphasizes that utility is measurable. This means that the quantity of goods or services that satisfies the need of a consumer can be evaluated through the use of figures ranging from zero to infinity. Total utility depends on the quantity of goods and services.
Ordinal School of Thought: It requires that consumers make a scale of preference, by choosing between the various commodities that gives one the same level of satisfaction. This approach assumes that utility can only be ranked not measured at various levels of consumption. It makes use of an indifference curve.
Different views of the two schools of thought:
a. Cardinal utility is a utility that determines the satisfaction of a commodity used by an individual and can be supported with a numeric value. On the other hand, Ordinal utility defines that satisfaction of user goods can be ranked in order of preference but cannot be evaluated numerically.
b. The measuring term of cardinal and ordinal utility is utils and ranks respectively.
c. Cardinal utility is based on marginal utility analysis while Ordinal utility is based on indifference curve analysis.
d. Cardinal School of Thought assumes that all consumers are rational while Ordinal School of Thought does not.
e. Cardinal utility has a quantitative approach while Ordinal utility has a qualitative approach.
f. Another point to be considered as a difference between Cardinal utility and Ordinal utility is that Ordinal evolution is sure to give outcomes. The Ordinal utility is preferred more because it provides more robust realistic results than the Cardinal utility. The concept of Cardinal utility is obsolete, but still, it is used for contexts like discounted utilities, making settlements under risk and utilitarian welfare calculation.

3. The demand for labor is a economic principle derives from the demand for a firm’s output. That is, if the demand for a firm’s output increases, the prices of goods will increase and because the firm would want to make more profits, the firm will demand more labor, thus hiring more staff, the increase of wages and the pricing of productive factors. This would shift the labor demand curve outwards.

◦Omenihu Vivacious Chidirim
11331381IJ
Public Administration and Local government
utility is the total satisfaction or benefit derived from consuming a good or service. Economic theories based on rational choice usually assume that consumers will strive to maximize their utility.

In practice, a consumer’s utility is usually impossible to measure or quantify. However, some economists believe that they can indirectly estimate what is the utility of an economic good or service by employing various models.

The utility definition in economics is derived from the concept of usefulness. An economic good yields utility to the extent to which it’s useful for satisfying a consumer’s want or need.
Various schools of thought differ as to how to model economic utility and measure the usefulness of a good or service.

◦
Ordinal Utility
Early economists of the Spanish Scholastic tradition of the 1300s and 1400s described the economic value of goods as deriving directly from this property of usefulness and based their theories on prices and monetary exchanges.

This conception of utility was not quantified, but a qualitative property of an economic good.
Later economists, particularly those of the Austrian School, developed this idea into an ordinal theory of utility, or the idea that individuals could order or rank the usefulness of various discrete units of economic goods.

Austrian economist Carl Menger, in a discovery known as the marginal revolution, used this type of framework to help him resolve the diamond-water paradox that had vexed many previous economists. Because the first available units of any economic good will be put to the most highly valued uses, and subsequent units go to lower-valued uses, this ordinal theory of utility is useful for explaining the law of diminishing marginal utility and fundamental economic laws of supply and demand.

Cardinal Utility
◦ To Bernoulli and other economists, utility is modeled as a quantifiable or cardinal property of the economic goods that a person consumes.
◦ To help with this quantitative measurement of satisfaction, economists assume a unit known as a “util” to represent the amount of psychological satisfaction a specific good or service generates for a subset of people in various situations.
◦ The concept of a measurable util makes it possible to treat economic theory and relationships using mathematical symbols and calculations.
◦ However, it separates the theory of economic utility from actual observation and experience, since “utils” cannot actually be observed, measured, or compared between different economic goods or between individuals.
◦ If, for example, an individual judges that a piece of pizza will yield 10 utils and that a bowl of pasta will yield 12 utils, that individual will know that eating the pasta will be more satisfying. For the producers of pizza and pasta, knowing that the average bowl of pasta will yield two additional utils will help them price pasta slightly higher than pizza.
◦ Additionally, utils can decrease as the number of products or services consumed increases. The first slice of pizza may yield 10 utils, but as more pizza is consumed, the utils may decrease as people become full. This process will help consumers understand how to maximize their utility by allocating their money between multiple types of goods and services as well as help companies understand how to structure tiered pricing.
◦
◦ Markets for labor have demand and supply curves, just like markets for goods. The law of demand applies in labor markets this way: A higher salary or wage—that is, a higher price in the labor market—leads to a decrease in the quantity of labor demanded by employers, while a lower salary or wage leads to an increase in the quantity of labor demanded. The law of supply functions in labor markets, too: A higher price for labor leads to a higher quantity of labor supplied; a lower price leads to a lower quantity supplied.

Name: Eze Emmanuel uchenna

Department: statistics

reg number: 10674530IH

email: dominiceze127@gmail.com

1) Briefly discuss the elementary theory of utility.

In economics, utility theory tries to explain the behavior of individual consumers in an economy. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences.

2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.

cardinal utility and ordinal utility

The cardinal utility believes in measuring the satisfaction level in utils . A cardinal utility function or scale is a utility index that preserves preference orderings uniquely up to positive affine transformations.

Ordinal Utility is the utility where the satisfaction derived by consuming a product cannot be expressed numerically.
In ordinal utility, the consumer only ranks choices in terms of preference but we do not give exact numerical figures for utility. For example, we prefer a BMW car to a Nissan car, but we don’t say by how much. It is argued this is more relevant in the real world.

3) Explain the demand for and pricing of productive factors emphasizing on the labour market.

If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase.the price of a factor of production is determined at a point where the demand and supply curves of the factor intersect each other.The demand for labor describes the amount and market wage rate workers and employers settle upon at any given moment.

Assignments
1 briefly discuss the elementary theory of utility
Answer: utility is a term used to determine the worth or values of a good or service.more specifically, utility is the total satisfaction or benefit derived from consuming a good or service. economic theories based on rational choice usually assume that consumers will strive to maximize their utility.
2 mention and discuss the difference views of utility according to the two schools of thought
(a) cardinal school of thought states that the level of satisfaction a consumer acquires after consuming any good and services can be measurable and expressed in quantitative Numbers
(b) ordinal school of thought states that the level of satisfaction a consumer obtain after consuming various commodities cannot be arranged in the order of preference.
3 explain the demand for & pricing of production factors emphasizing on the labour market.
Answer
when the demand for a firm’s product increases, the firm will demand more labour to sell the additional units of goods or services.the assumption here is that the markets will demand the goods produced by labour, which in turn will be employed by firms.

Name: Eze Emmanuel uchenna

Reg no: 10674530IH

Department: statistics

Email : uemma37@gmail.com

1) Briefly discuss the elementary theory of utility.

In economics, utility theory tries to explain the behavior of individual consumers in an economy. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences.

2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.

Cardinal utility believes in measuring the satisfaction level in utils . A cardinal utility function or scale is a utility index that preserves preference orderings uniquely up to positive affine transformations.

Ordinal utility is the utility where the satisfaction derived by consuming a product cannot be expressed numerically.
In ordinal utility, the consumer only ranks choices in terms of preference but we do not give exact numerical figures for utility. For example, we prefer a BMW car to a Nissan car, but we don’t say by how much. It is argued this is more relevant in the real world.

3) Explain the demand for and pricing of productive factors emphasizing on the labour market.

If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase.the price of a factor of production is determined at a point where the demand and supply curves of the factor intersect each other.The demand for labor describes the amount and market wage rate workers and employers settle upon at any given moment.

Name: Eze Emmanuel uchenna
reg number: 10674530IH
Email: uemma40@gmail.com
department: statistics

1) Briefly discuss the elementary theory of utility.

In economics, utility theory tries to explain the behavior of individual consumers in an economy. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences.

2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.

The cardinal utility believes in measuring the satisfaction level in utils.A cardinal utility function or scale is a utility index that preserves preference orderings uniquely up to positive affine transformations.

Ordinal Utility is the utility where the satisfaction derived by consuming a product cannot be expressed numerically.In ordinal utility, the consumer only ranks choices in terms of preference but we do not give exact numerical figures for utility.

3) Explain the demand for and pricing of productive factors emphasizing on the labour market.
If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase.the price of a factor of production is determined at a point where the demand and supply curves of the factor intersect each other.

Name: Eze Emmanuel uchenna
reg number: 10674530IH
Email: uemma37@gmail.com
department: statistics

1) Briefly discuss the elementary theory of utility.

In economics, utility theory tries to explain the behavior of individual consumers in an economy. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences.

2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.

cardinal utility and ordinal utility

The cardinal utility believes in measuring the satisfaction level in utils . A cardinal utility function or scale is a utility index that preserves preference orderings uniquely up to positive affine transformations.

Ordinal Utility is the utility where the satisfaction derived by consuming a product cannot be expressed numerically.
In ordinal utility, the consumer only ranks choices in terms of preference but we do not give exact numerical figures for utility.

3) Explain the demand for and pricing of productive factors emphasizing on the labour market.

If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase.the price of a factor of production is determined at a point where the demand and supply curves of the factor intersect each other.
The demand for labor describes the amount and market wage rate workers and employers settle upon at any given moment.

Name: Eze Emmanuel uchenna
Department: statistics
reg number: 10674530IH

1) Briefly discuss the elementary theory of utility.

In economics, utility theory tries to explain the behavior of individual consumers in an economy. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences.

2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.

cardinal utility and ordinal utility

The cardinal utility believes in measuring the satisfaction level in utils . A cardinal utility function or scale is a utility index that preserves preference orderings uniquely up to positive affine transformations.

Ordinal Utility is the utility where the satisfaction derived by consuming a product cannot be expressed numerically.
In ordinal utility, the consumer only ranks choices in terms of preference but we do not give exact numerical figures for utility. For example, we prefer a BMW car to a Nissan car, but we don’t say by how much. It is argued this is more relevant in the real world.

3) Explain the demand for and pricing of productive factors emphasizing on the labour market.

If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase.the price of a factor of production is determined at a point where the demand and supply curves of the factor intersect each other.
The demand for labor describes the amount and market wage rate workers and employers settle upon at any given moment.

Name: Eze Emmanuel uchenna
Department: statistics
reg number: 10674530IH

1) Briefly discuss the elementary theory of utility.

In economics, utility theory tries to explain the behavior of individual consumers in an economy. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences.
Utility theory argues that each person, given a list of options, can rank those options in a precise order of preference. Each person has different choices which are set, not changing over time.

2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.

cardinal utility and ordinal utility

The cardinal utility believes in measuring the satisfaction level in utils . A cardinal utility function or scale is a utility index that preserves preference orderings uniquely up to positive affine transformations.

Ordinal Utility is the utility where the satisfaction derived by consuming a product cannot be expressed numerically.
In ordinal utility, the consumer only ranks choices in terms of preference but we do not give exact numerical figures for utility. For example, we prefer a BMW car to a Nissan car, but we don’t say by how much. It is argued this is more relevant in the real world.

3) Explain the demand for and pricing of productive factors emphasizing on the labour market.

If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase. This means the law of demand applies in labor markets this way: A higher salary or wage—that is, a higher price in the labor market—leads to a decrease in the quantity of labor demanded by employers, while a lower salary or wage leads to an increase in the quantity of labor demanded.the price of a factor of production is determined at a point where the demand and supply curves of the factor intersect each other.
The demand for labor describes the amount and market wage rate workers and employers settle upon at any given moment.

Name:Ubadire Sopuruchi Edna
Reg No: 2019/244333
Department: Nursing Science

1. Utility theory is based on the fact that satisfaction which consumers derived from consumption of goods and services can be measure quantitative. Utility theory is a positive theory that seeks to explain the individual’s observed behavior and choices.

2a. Cardinal school of thought: this approach emphasizes that utility is measurable. that is, after consuming a given quantity of a commodity the consumer can simply evaluate his satisfaction through the use of figures which range from Zero to infinity

2b. Ordinal school of thought: this approach explains that the satisfaction level after consuming any goods or services cannot be scaled in numbers. However these things can be arranged in order of preference

3.If labour productivity increases, firms will demand more labour at each wage rate and the firm’s demand for labour itself will increase. This would shift the labour demand curve outwards

Name: Nwafor Emmanuel Chukwudubem

Reg no: 10410862FG

Department: statistics

Email : 55emmachi@gmail.com

1) Briefly discuss the elementary theory of utility.

Utility in economics measures the value of something, which is found in how useful an item is for individuals and other economic participants. Utility theory in economics pertains to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness.

2) Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.

Cardinal utility It explains that the satisfaction level after consuming any goods or services can be scaled in terms of countable numbers. The Utility is measured based on utils.

Ordinal utility means ranking items under consideration from most satisfaction to the least. Many economists believe that consumers do this in their heads when they make purchase decisions. The Utility is ranked based on satisfaction.

3) Explain the demand for and pricing of productive factors emphasizing on the labour market.

The demand for labour shows how many workers the firms are willing and able to hire at a given time and wage rate.
According to the modem theory, the price of a factor of production is determined at a point where the demand and supply curves of the factor intersect each other. This point is known as equilibrium point, where the demand of a factor is equal to its supply.

NAME:ORJIUDE NNAORJI IZUCHUKWU
REG NO:2021/241360
DEPARTMENT:ECONOMICS

Briefly discuss the elementary theory of utility

The elementary theory of utility is a foundational concept in economics that explains how individuals make choices and maximize their satisfaction or well-being from consuming goods and services.
According to this theory, individuals make rational choices by weighing the costs and benefits of different alternatives and selecting the one that provides the highest level of utility, or satisfaction. Utility is typically measured in abstract units called utils, which represent the subjective value that an individual places on a good or service.
The theory assumes that individuals have consistent preferences, meaning that they have a clear hierarchy of preferences and will always choose the option that is most preferred. It also assumes that individuals have a limited amount of income and face a budget constraint, which means that they have to make trade-offs between different goods and services.
The theory also states that the marginal utility of a good decreases as an individual consumes more of it. This means that the first unit of a good provides the most utility, the second unit provides less utility than the first, and so on. This concept is known as the law of diminishing marginal utility.
Overall, the elementary theory of utility provides a basic framework for understanding how individuals make decisions and allocate resources based on their preferences and constraints.

Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.

In economics, there are two main schools of thought regarding the concept of utility: the classical or cardinal school and the neoclassical or ordinal school. The views of utility in these schools differ in significant ways.
Classical school:
The classical school of economics views utility as a measurable, objective property of goods and services. According to this school, utility is determined by the physical properties of a good or service and can be measured by the amount of labor or resources required to produce it. The classical school also believed that the value of goods and services is determined by the cost of production, rather than by the subjective preferences of individuals.
Neoclassical school:
In contrast, the neoclassical school of economics views utility as a subjective, individual experience. According to this school, utility is not an objective property of goods and services, but rather a subjective experience that varies from person to person. Neoclassical economists argue that individuals have unique preferences and tastes, and that utility can only be measured subjectively based on an individual’s own assessment of the value they derive from a good or service.
Neoclassical economists also believe that the value of goods and services is determined by the subjective preferences of individuals, rather than by the cost of production. They argue that the price of a good or service is ultimately determined by the interaction between supply and demand, which reflects the subjective preferences and valuations of all market participants.
Overall, the classical school views utility as an objective property of goods and services that can be measured based on the cost of production, while the neoclassical school views utility as a subjective experience that varies from person to person and can only be measured subjectively based on individual preferences and valuations.

Explain the demand for and pricing of productive factors emphasizing on the labour market
.
In economics, the demand for and pricing of productive factors refer to the market forces that determine the quantity of a productive factor, such as labor, that firms are willing to employ and the wage rate they are willing to pay.
The demand for labor is derived from the demand for the goods and services that labor produces. When the demand for goods and services increases, firms need to increase their production to meet the demand, which often requires hiring more labor. The quantity of labor demanded by firms depends on the marginal productivity of labor, which is the additional output that is produced by each additional unit of labor. If the marginal productivity of labor is high, firms will be willing to hire more labor at a higher wage rate, while if it is low, firms will demand less labor at a lower wage rate.
In the labor market, the pricing of labor is determined by the interaction between the supply and demand for labor. The supply of labor is determined by the number of people who are willing and able to work at different wage rates. The higher the wage rate, the more people will be willing to work, while the lower the wage rate, the fewer people will be willing to work.
The wage rate is determined by the intersection of the supply and demand for labor. If the demand for labor is greater than the supply, the wage rate will increase, as firms compete to hire workers. If the supply of labor is greater than the demand, the wage rate will decrease, as workers compete for a limited number of jobs.
Overall, the demand for and pricing of productive factors, such as labor, are determined by market forces. The demand for labor is derived from the demand for the goods and services that labor produces, while the pricing of labor is determined by the interaction between the supply and demand for labor in the labor market.

1 THEORY OF UTILITY
Utility is an economic term that measures the total value or satisfaction that a consumer derives from purchasing and using a service or product. it is also the satisfaction a consumer gets from consuming or using a goods or services.. for example,
People need to eat food to survive, but some foods are better than others. A packet of instant ramen does not taste as good or provide the same nutrition as a home-cooked meal does. Economists may assign, say, one unit of utility to a pack of instant ramen and three units of utility to a home-cooked meal based on the difference in the satisfaction that the eater receives from each meal. The different values help explain why instant ramen usually has less demand and is cheaper than a home-cooked meal.

2 SCHOOL OF THOUGHT OF UTILITY
i.Cardinal utility Cardinal Utility is the utility where the satisfaction derived by consuming a product can be expressed numerically
ii. Ordinal utility::The concept of ordinal utility states that the level of satisfaction a consumer obtains after consuming various commodities cannot be measured in numbers but can be arranged in the order of preferences
3..When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economic principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.

Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.

1. BRIEFLY DISCUSS THE ELEMENTARY
THEORY OF UTILITY
Utility theory in economics pertains to the value or worth of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness. The premise was initially theorized by Swiss mathematician, Daniel Bernoulli, in the 18th century. Bernoulli founded the idea with regard to the differing values of things. With respect to theory, the utility of an item tends to be closely correlated to its price. An item such as gold, which is very useful and thus has great utility (combined with its scarcity), is very expensive.
2. MENTION AND DISCUS THE DIFFERENT
VIEWS OF UTILITY ACCORDING TO THE
TWO SCHOOL OF THOUGHTS WHICH YOU
HAVE BEEN TAUGHT
However, cardinal utility and ordinal utility are the two predominant theories of utility. The cardinal utility believes in measuring the satisfaction level in utility and the ordinal utility believes that the satisfaction level cannot be evaluated; however, it can be levelled.
Cardinal utility is an economic function used by customers to know how many something used in number or quantity to get desired degree of satisfaction after consumption of goods and services, whereas ordinal utility used in economic to know order of goods and services according to satisfaction preference of customers after consuming products. Ordinal utility used for ranking of goods and services according to customers preference of needs and demands.
Utility is a economic term used for measuring physiological fact which consists of wanting satisfaction power of goods and services.
Cardinal utility measurement in economic is done in utilis unit and ordinal utility measurements done in economic through ranking of satisfaction preference of goods and services.
Utility is considered as unit of measurement of cardinal utility and ranking of one goods in comparison with other goods in market tells consumer preference of goods.
In ordinal utility measurements of goods satisfaction level for consumer is done subjectively and in cardinal utility goods satisfaction level is measured objectively.
Quantitative value of goods are used for measuring cardinal utility which means not realistic in economic. Cardinal utility measurement unrealistic because in economics evaluation of satisfaction through quantitative way which is not much practically possible.
Qualitative evaluation is done in ordinal utility for measurements of degree of satisfaction of goods. In economic qualitative evaluation of satisfaction make ordinal utility measurements more realistic.
Cardinal utility presented in diagram of indifference curve. Indifference curve tell about customers cardinal utility measured after consumption of goods. Ordinal utility also represented in diagram of marginal utility analysis.
Cardinal utility was given by Dr. Alfread Marshall and his admirers whereas ordinal utility was given by Hicks and Allen.
3. EXPLAIN THE DEMAND FOR AND PRICING OF PRODUVTIVE FACTORS EMPHASIZING ON LABOUR MARKET.
When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.
Labor market factors drive the supply and demand for labor. Those seeking employment will supply their labor in exchange for wages. Businesses demanding labor from workers will pay for their time and skills.Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.A profit-maximizing entity will command additional units of labor according to the marginal decision rule: If the extra output that is produced by hiring one more unit of labor adds more to total revenue than it adds to the total cost, the firm will increase profit by increasing its use of labor. It will continue to hire more and more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor. This relationship is also called the marginal product of labor in the economics community.
Factor pricing is associated with the prices that an entrepreneur pays to avail the services rendered by the factors of production. For example, an entrepreneur needs to pay wages to labor, rents for availing land, and interests for capital so that he/she can earn maximum profit. These factors of production directly affect the production process of an organization.

1) Utility is the satisfaction a consumer derives after the consumption of a particular product. Utility theory bases it’s belief upon individuals preferences.it is the the theory postulated in economics to explain behavior of individuals based on the premises people can rank their choices depending upon their preferences… Utility theory is based on the marginal utility, total utility, e.t.c.

2) The two school of thought on the views of utility are:
Ordinal and Cardinal
Ordinal school of thought : This approach emphasis that utility of a commodity cannot be measured in absolute quantity but however it will be possible for a consumer to subjectively tell whether the commodity derives more or less or equal satisfaction when compared to another product. It cannot be measured in numbers but can be arranged in order of preference.

Cardinal school of thought: This approach emphasis that utility is measurable, i.e a consumer can evaluate his satisfaction after consuming a given product through the use of figures or numbers.

3) The demand is the demand for the goods, the more is the demand for labour to produce it. The demand for labour is an economic principle derived from the demand for a firm’s output. That is, if the demand for a firm’s product or commodity increases, the firm will demand for more labour, thus hiring more workers. For example, in car factory where cars are assembled, if the price of the car being sold is higher, the more valuable to the employer is the workers labour. The labour market comprises of these components, the individual selected, the applicant population, the labour force population,and the applicant pool.

1). In economics, utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisfaction or benefit derived from consuming a good or service. Economic theories based on rational choice usually assume that consumers will strive to maximize their utility.

2. I. Cardinal Utility
II. Ordinal Utility

i. Cardinal utility is a quantitative approach to measuring utility. It presents the utility of something as a fixed number – it’s an exact measure of utility. An individual can rank goods or services according to their cardinal utility by comparing the utility numbers derived from the goods or services. For example, a bunch of 20 bananas can be said to have a cardinal utility of 20, whereas a bunch of 10 only has a utility value of 10.
Ordinal utility is a relative measure of utility. It describes how one can determine the value of a good or service by comparing it to another. This measurement only captures which good or service is better, not how much better it is. Customers might assign value to goods or services according to ordinal utility. For example, a man asks his friend which one of two local barbershops is better. His friend tells him barber B is better because his skills are more refined. This is a relative measure as one can’t quantitatively measure how much better the one barber cuts hair compared to the other.

3). DEMAND FOR PRODUCTIVE FACTORS (LABOUR);
The demand for factors of production is simply the demand for inputs used in production of goods and services. This demand, is derived from the demand for commodities or output. Therefore, it is evident that the demand for the factors of production is a Derived Demand. Labor as one of the factors of production, and the most important of all factors, is defined as all man-made or human efforts (physical efforts or incentives) put into production. The market demand for labor is obtained by putting together or aggregating the demand for labor of individual firms existing in a market.

PRICING OF PRODUCTIVE FACTORS (LABOR);
Pricing or costing is the act of establishing a monetary value for a commodity. The theory of pricing of productive factors is a theory that is concerned with the principles according to which the price of each factor of production is determined and distributed. The reward, payment or cost of labor is wages or salaries. The cost for labor therefore, is the sum of all wages, benefits, and payroll paid to employees by an employer. Labor costs are divided into two categories; Direct Labor Cost and Indirect Labor Cost .

1). In economics, utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisfaction or benefit derived from consuming a good or service. Economic theories based on rational choice usually assume that consumers will strive to maximize their utility.

2).I. Cardinal Utility
ll. Ordinal Utility

I. Cardinal utility is a quantitative approach to measuring utility. It presents the utility of something as a fixed number – it’s an exact measure of utility. An individual can rank goods or services according to their cardinal utility by comparing the utility numbers derived from the goods or services.For example, a bunch of 20 bananas can be said to have a cardinal utility of 20, whereas a bunch of 10 only has a utility value of 10.
II. Ordinal utility is a relative measure of utility. It describes how one can determine the value of a good or service by comparing it to another. This measurement only captures which good or service is better, not how much better it is. Customers might assign value to goods or services according to ordinal utility. For example, a man asks his friend which one of two local barbershops is better. His friend tells him barber B is better because his skills are more refined. This is a relative measure as one can’t quantitatively measure how much better the one barber cuts hair compared to the other.

3). DEMAND FOR PRODUCTIVE FACTORS (LABOUR);
The demand for factors of production is simply the demand for inputs used in production of goods and services. This demand, is derived from the demand for commodities or output. Therefore, it is evident that the demand for the factors of production is a Derived Demand. Labor as one of the factors of production, and the most important of all factors, is defined as all man-made or human efforts (physical efforts or incentives) put into production. The market demand for labor is obtained by putting together or aggregating the demand for labor of individual firms existing in a market.
PRICING OF PRODUCTIVE FACTORS (LABOR);
Pricing or costing is the act of establishing a monetary value for a commodity. The theory of pricing of productive factors is a theory that is concerned with the principles according to which the price of each factor of production is determined and distributed. The reward, payment or cost of labor is wages or salaries. The cost for labor therefore, is the sum of all wages, benefits, and payroll paid to employees by an employer. Labor costs are divided into two categories; Direct Labor Cost and Indirect Labor Cost .

Nnanyere Success Ihechukwu
2021/241956
Department of Economics

1. Elementary Theory of Utility
Utility refers to the ability of goods or services to satisfy unlimited human wants. It can also be viewed as satisfaction, pleasure or fulfillment an individual derives from the consumption of goods and services. Goods are desired because of their ability to satisfy human wants. The concept of Utility is used to express consumer’s tastes and preferences. The analysis of consumer tastes and preferences is a crucial step in determining how a consumer maximises satisfaction in spending income.
The utility of a consumer is relatively hard to measure. However,it can be determined indirectly with consumer behavior theories which assume that consumer’s will strive to maximize their utility with the resources available.
This, when a consumer derives satisfaction from consuming goods and services,it can be said that the goods or services utilized possesses utility,which is relative to the consumer depending on time, place,form and possession.

2.Mention and discuss the different views of utility according to the two schools of thoughts which you have been taught.
1. The cardinal School of thought:
This school of thought views utility from it aspect of measurability. This means that the quantity of goods or services that satisfies the need of a consumer can be evaluated through the use of figures ranging from zero to infinity.
Assumptions of Cardinal Approach
i. Total utility depends on the quantity of goods or services.
ii. Money income of the consumer is held constant.
iii. There’s diminishing marginal utility
iv. The consumer is rational
v. Utility is measurable.
2. Ordinal School of Thought:
This school of thought requires that consumer make a scale of preference by choosing between the various commodities that gives one the same level of satisfaction.
This approach assumes that utility can be ranked at various levels of consumption. This approach makes use of an indifference curve which indicates the level of satisfaction attained by a consumer from the consumption of two commodities.
3.Explain the demand for and pricing of productive factors emphasizing on the labour market.
The demand for a factor of production is not a direct demand but a derived demand. The demand for labour for example,is not the demand for labour itself but the demand for Goods and services which the labour itself produces.
Thus, when the demand for Goods and services increases, the demand for the factors which produces those goods would also increase. If the demand for Goods is elastic, the demand for productive factors (labour) would be elastic,vice versa.
When more of a factor is employed,it’s marginal productivity is likely to fall hence it’s demand and price of a factor also depends upon the market price of the goods for the production of which the factor is used. If the goods are being sold at high prices,the demand for the factors will also be high.
Pricing of Productive Factors
Labour market like other market in the economy are governed by the forces of demand and supply. The supply and demand determine the wage or price paid for labour services.The pricing for labour depends on the interaction of the market forces.

UTILITY
It means the satisfaction gained by the customer from the consumption of goods and services. Utility is the affordability of the consumer to consume goods and services that will give satisfaction to the consumer .
THEORY OF UTILITY
Satisfaction received by the consumer or pleasure from consuming a good is a basis to make a choice goods and to value goods.

DIFFERENT VIEWS OF UTILITY
MARGINAL UTILITY; It is a additional satisfaction derived from consuming an extra unit of a commodity by a consumer.
TOTAL UTILITY; It is the aggregate satisfaction derived from the consumption of a commodity by a consumer.
AVERAGE UTILITY; Average utility refers to the utility that is obtained by the consumer per unit of commodity consumed. It is calculated by dividing the total utility by the number of units consumed.

3. Demand for labour is a concept that describes the amount of demand for labour that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labour and the number of workers willing to supply labour at that wage.

Other Considerations in Demand for Labour

According to the law of diminishing marginal returns, by definition, in most sectors, eventually the MPL will decrease. Based on this law: as units of one input are added (with all other inputs held constant) a point will be reached where the resulting additions to output will begin to decrease; that is marginal product will decline.

Another consideration is the marginal revenue product of labour (MRPL), which is the change in revenue that results from employing an additional unit of labour, holding all other inputs constant. This can be used to determine the optimal number of workers to employ at a given market wage rate. According to economic theory, profit-maximizing firms will hire workers up to the point where the marginal revenue product is equal to the wage rate because it is not efficient for a firm to pay its workers more than it will earn in revenues from their labour.

Name: Sampson GiftofGod Chiamaka
Department: Nursing Science.
Faculty: Health Science and Technology.
Level: 100
Matric no: 2021/244664

Assignment

1. Briefly discuss the elementary theory of utility.

Utility theory bases its beliefs upon individuals’ preferences. It is a theory postulated in economics to explain behavior of individuals based on the premise people can consistently rank order their choices depending upon their preferences. Each individual will show different preferences, which appear to be hard-wired within each individual. We can thus state that individuals’ preferences are intrinsic. Any theory, which proposes to capture preferences, is, by necessity, abstraction based on certain assumptions. Utility theory is a positive theory that seeks to explain the individuals’ observed behavior and choices.The distinction between normative and positive aspects of a theory is very important in the discipline of economics. Some people argue that economic theories should be normative, which means they should be prescriptive and tell people what to do. Others argue, often successfully, that economic theories are designed to be explanations of observed behavior of agents in the market, hence positive in that sense. This contrasts with a normative theory, one that dictates that people should behave in the manner prescribed by it. Instead, it is only since the theory itself is positive, after observing the choices that individuals make, we can draw inferences about their preferences.

2. Mention and discuss the different views of utility according to the two schools of thoughts you have been taught.

Rationality: The consumer is rational. …
Cardinal Utility: ADVERTISEMENTS: …
Constant Marginal Utility of Money: …
Diminishing Marginal Utility: …
The total utility of a ‘basket of goods’ depends on the quantities of the individual commodities.
Rationality of Consumer:
This analysis assumes the rational consumers whose objective is to maximize the utility under the budget constraint.
Ordinal Measurement:
The utility is measured ordinally by comparing the satisfaction whether higher or lower by consuming different bundles of goods. It is sufficient that the consumer expresses his/her preference for the various bundles of goods commodities. It is not obligatory to undertake that utility is quantitively quantifiable.
Transitivity:
According to this assumption, when there are three goods A, B, and C and if the consumer chooses as A > B, B > C, then A > C. It is acknowledged as transitivity in preference.
Consistency:
As per this assumption, the consumer remains consistent in choice. If there are two goods A and B then A is preferred over B i.e. A > B. At the same time B cannot be preferred over A. i.e. B  A. It is called consistency in choice.
Non- satiety:
The consumer always prefers moreover less if there is a choice available to him. It means the consumer has not reached to point of saturation in case of any commodity such condition is called non-satiety.
Diminishing Marginal Rate of Substitution (DMRS):
Under this theory, the marginal rate of substitution between two goods always diminishes so that a consumer can attain the same level of satisfaction. It is given by ΔY/ΔX in the case of two goods X and Y and it tells the rate of substituting commodity X to get one more unit of commodity Y.

3. Explain the demand for and pricing of productive factors emphasizing on the labour market.
Demand for labor is a concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given point in time. This demand may not necessarily be in long-run equilibrium. It is determined by the real wage firms are willing to pay for this labor and the number of workers willing to supply labor at that wage.

A profit-maximizing entity will command additional units of labor according to the marginal decision rule: If the extra output that is produced by hiring one more unit of labor adds more to total revenue than it adds to the total cost, the firm will increase profit by increasing its use of labor. It will continue to hire more and more labor up to the point that the extra revenue generated by the additional labor no longer exceeds the extra cost of the labor. This relationship is also called the marginal product of labor (MPL) in the economics community.
Markets for labor have demand and supply curves, just like markets for goods. The law of demand applies in labor markets this way: A higher salary or wage—that is, a higher price in the labor market—leads to a decrease in the quantity of labor demanded by employers, while a lower salary or wage leads to an increase in the quantity of labor demanded. The law of supply functions in labor markets, too: A higher price for labor leads to a higher quantity of labor supplied; a lower price leads to a lower quantity supplied.

1: Briefly discuss the Elementary theory of utility:

We know that utility has to do with the taste and preferences of consumers. So, if the consumer likes klin detergent over WAW, he or she won’t hesitate to go for the preferred one (klin) when purchasing, that is to say that the taste and preferences of an individual doesn’t change and is fixed. In other words, utility can’t be measured.

2. Mention and discuss the different views of utility according to the two schools of thought which you have been taught:

a. “Ordinal” utility refers to the concept of one good being more useful or desirable than another. Consumers rank choices in terms of their preferences but doesn’t give exact numerical figures for utility. For instance, we prefer BMW car to a Nissan car, but we don’t say by how much. Therefore; Ordinal utility states that the satisfaction which a consumer derives from the consumption of product or service cannot be measured numerically. There is a subjective measurement of ordinal utility and it is more realistic as it relies on qualitative measurement.

b. “Cardinal” utility is the idea of measuring economic value through imaginary units, known as “utils.” Cardinal utility is the utility wherein the satisfaction derived by the consumers from the consumption of good or service. It can be measured numerically and it measures the utility objectively. Cardinal utility is less realistic, as quantitative measurement of utility is not possible. For instance; if Nissan car gives 5,000 units of utility and BMW car gives 8,000 units of utility, people will be able to express utility that consumption gives for a given good.
It is therefore based on marginal utility analysis.

3. Demand for Labour market and Pricing of productive factors on labour market:

a. Pricing of productive factors on labour market:

Factors of production can be defined as inputs used for producing goods or services with the aim to make economic profit. Factors of production are economic goods: scarce means used to achieve an individual’s ends. In economics, there are four main factors of production, namely land, labor, capital, and enterprise. Each is examined. The price that an entrepreneur pays for availing the services of these factors is called factor pricing.
An entrepreneur pays rent, wages, interest, and profit for availing the services of land, labor, capital, and enterprise respectively. The theory of factor pricing deals with the price determination of different factors of production.

b. Demand for Labour market:

Demand for labour market shows how many workers the firms are willing and able to hire at a given time and wage rate. Therefore, it illustrates the amount of labour a firm is willing to employ at a particular wage rate.
It an economic principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labour, thus hiring more staff.