Linear utility (original) (raw)

In economics and consumer theory, a linear utility function is a function of the form: or, in vector form: where: * is the number of different goods in the economy. * is a vector of size that represents a bundle. The element represents the amount of good in the bundle. * is a vector of size that represents the subjective preferences of the consumer. The element represents the relative value that the consumer assigns to good . If , this means that the consumer thinks that product is totally worthless. The higher is, the more valuable a unit of this product is for the consumer.