[This is part of the series: The Complete Guide To Economics 101.]
What is utilitarianism?
Utilitarianism is a political or moral theory that values increasing overall utility above other values.
This means Policy 2 is always preferred to Policy 1.
Policy 1
Group 1 – Utility of 50, increases to 75.
Group 2 – Utility of 200, increases to 225.
Policy 1 Total Utility = 300
Policy 2
Group 1 – Utility of 50, increases to 51.
Group 2 – Utility of 200, increases to 250.
Policy 2 Total Utility = 301