A butcher who cuts a larger piece of beef into steaks is an example of which type of utility?

• A. Place utility
• B. Time utility
• C. Possession utility
• D. Form utility

Answer: (D)

Verified step by step guidance

1. Understand the concept of utility in microeconomics, which refers to the satisfaction or value a consumer derives from a good or service.
2. Recognize that 'form utility' is created when a product is transformed or processed into a more useful or desirable form, increasing its value to the consumer.
3. Analyze the example: a butcher cutting a larger piece of beef into steaks changes the form of the product, making it more convenient and appealing for consumers to purchase and use.
4. Compare this with other types of utility: 'place utility' relates to making a product available at a convenient location, 'time utility' involves making a product available at a convenient time, and 'possession utility' refers to the ease of ownership or transfer of the product.
5. Conclude that since the butcher is changing the physical form of the beef, this is an example of 'form utility'.