In many of the exercises, we measured utility with monetary value. At times, especially with small amounts of money, this is reasonable. However, often utility and monetary value diverge. This can be seen by considering two facts, diminishing marginal utility and risk aversion.
Diminishing Marginal Utility
The utility of a certain amount of money depends on how much money you already
have. By and large (but not always), every extra money you get has a little
less value for you. That's why if you give me $10,000 I'll be ecstatic,
but if you give them to Bill Gates he won't even notice.
Risk Aversion
Most people, though not all, have aversion to risk. For example, suppose
you are given a choice: you can pocket $60 right now, or you can play a game
in which you have a 60% chance of winning $100. The expected utility of
the two outcomes is the same, i.e., $60, but most people would choose the first
option. In fact they would agree to play the game only if the probability
of winning were considerably higher. This indicates that they don't always
measure utility in terms of monetary value. Of course, one might always claim
that such rankings are irrational, although risk aversion seems to be psychologically
widespread.