A utility function
A)measures relative happiness and income of consumers.
B)needs to measure the absolute level of happiness.
C)needs to measure relative amounts of happiness for a single individual.
D)is most useful if it can be influenced by others.
E)helps compare the relative happiness of two separate consumers.

Question

Quizplus · Accepted Answer

Utility functions are used to represent an individual's preference ordering over a set of goods and services. They do not measure absolute levels of happiness but rather the relative satisfaction or utility that an individual derives from different bundles of goods. This allows for the comparison of different choices by the same individual, not the comparison of happiness between different individuals or the influence of others on one's utility.

A Utility Function