Final answer:
Utility is the satisfaction or happiness one gets from consuming a good or service. It is subjective and the level of utility may decrease as more units of a good are consumed.
Step-by-step explanation:
The satisfaction or happiness one gets from consuming a good or service is called utility. Utility is subjective and refers to the level of satisfaction or enjoyment a person experiences from consuming a particular good or service.
For example, if a person eats a slice of pizza, the first slice may bring them a high level of utility because they were hungry and enjoyed the taste. However, as they eat more slices, the additional utility they get from each slice decreases.
This pattern is known as the law of diminishing marginal utility, which means that as a person consumes more of a good, the additional utility they receive from each additional unit of the good declines.