Utility Analysis
Economics ⇒ Consumer and Producer Behaviour
Utility Analysis starts at 11 and continues till grade 12.
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See sample questions for grade 11
Define utility in the context of economics.
Describe any two assumptions of the Law of Diminishing Marginal Utility.
Describe the Law of Equi-Marginal Utility.
Explain the concept of utils in utility analysis.
A consumer derives 12 utils from the first unit, 9 from the second, and 5 from the third unit of a good. What is the marginal utility of the third unit?
A consumer gets 10 utils from the first chocolate, 8 from the second, and 6 from the third. What is the total utility after consuming three chocolates?
A consumer spends Rs. 20 on good X (MUx = 40) and Rs. 10 on good Y (MUy = 20). Is the consumer maximizing utility?
A consumer’s total utility from consuming 2 units of a good is 15 utils, and from 3 units is 18 utils. What is the marginal utility of the third unit?
Which of the following best describes marginal utility? (1) Total satisfaction from all units consumed, (2) Satisfaction from the last unit consumed, (3) Price paid for a good, (4) Cost of production
Which of the following is a limitation of the Law of Diminishing Marginal Utility? (1) Applies to all goods, (2) Assumes rationality, (3) Does not apply to rare collections, (4) Utility can be measured exactly
Which of the following is an assumption of the Law of Equi-Marginal Utility? (1) Unlimited income, (2) Constant marginal utility of money, (3) Goods are free, (4) Marginal utility increases with consumption
Which of the following is an example of diminishing marginal utility? (1) The first slice of pizza tastes best, (2) All slices taste the same, (3) The last slice tastes better than the first, (4) None of the above
Fill in the blank: The Law of Diminishing Marginal Utility is also known as the Law of __________ Returns.
Fill in the blank: The Law of Diminishing Marginal Utility is based on the __________ approach to utility.
Fill in the blank: The Law of Equi-Marginal Utility is also known as the Law of __________ Substitution.
Fill in the blank: The point at which marginal utility becomes negative is called the point of __________.
State whether the following statement is true or false: The Law of Diminishing Marginal Utility applies to money.
True or False: According to the Law of Diminishing Marginal Utility, total utility always decreases as more units are consumed.
True or False: Marginal utility can become negative if consumption continues beyond a certain point.
True or False: Marginal utility is the change in total utility resulting from a one-unit change in consumption.
