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Utility Maximization
Utility maximization was first developed by utilitarian philosophers Jeremy Bentham and John Stuart Mill. In microeconomics, the utility maximization problem is the problem consumers face: "How should I spend my money in order to maximize my utility?" It is a type of optimal decision problem. It consists of choosing how much of each available good or service to consume, taking into account a constraint on total spending (income), the prices of the goods and their preferences. Utility maximization is an important concept in consumer theory as it shows how consumers decide to allocate their income. Because consumers are rational, they seek to extract the most benefit for themselves. However, due to bounded rationality and other biases, consumers sometimes pick bundles that do not necessarily maximize their utility. The utility maximization bundle of the consumer is also not set and can change over time depending on their individual preferences of goods, price changes and increase ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Jeremy Bentham
Jeremy Bentham (; 15 February 1748 Old_Style_and_New_Style_dates">O.S._4_February_1747.html" ;"title="Old_Style_and_New_Style_dates.html" ;"title="nowiki/>Old Style and New Style dates">O.S. 4 February 1747">Old_Style_and_New_Style_dates.html" ;"title="nowiki/>Old Style and New Style dates">O.S. 4 February 1747ref name="Johnson2012" /> – 6 June 1832) was an English philosopher, jurist, and social reformer regarded as the founder of modern utilitarianism. Bentham defined as the "fundamental axiom" of his philosophy the principle that "it is the greatest happiness of the greatest number that is the measure of right and wrong." He became a leading theorist in Anglo-American philosophy of law, and a political radical whose ideas influenced the development of welfarism. He advocated individual and economic freedoms, the separation of church and state, freedom of expression, equal rights for women, the right to divorce, and (in an unpublished essay) the decriminalising of homosex ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
