Utility Analysis
Economics ⇒ Consumer and Producer Behaviour
Utility Analysis starts at 11 and continues till grade 12.
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A consumer consumes 5 units of a good. The total utility from 4 units is 40 utils and from 5 units is 45 utils. What is the marginal utility of the 5th unit?
A consumer gets 20 utils from the first unit of a good, 15 from the second, and 10 from the third. What is the marginal utility of the third unit?
A consumer’s total utility from consuming 3 chocolates is 30 utils, and from 4 chocolates is 32 utils. What is the marginal utility of the 4th chocolate?
Define utility in the context of economics.
Describe the importance of the Law of Diminishing Marginal Utility in consumer behaviour analysis.
Describe the relationship between total utility and marginal utility using a table or example.
A consumer spends Rs. 10 on good X and Rs. 20 on good Y. The marginal utility of X is 40 utils and of Y is 60 utils. According to the law of equi-marginal utility, should the consumer reallocate expenditure?
A consumer’s marginal utility schedule for a good is as follows: 1st unit: 12 utils, 2nd unit: 10 utils, 3rd unit: 7 utils, 4th unit: 3 utils. Calculate the total utility after consuming 4 units.
Which approach to utility assumes that utility can be measured in numbers? (1) Ordinal, (2) Cardinal, (3) Both, (4) Neither.
Which of the following best describes marginal utility? (1) Total satisfaction from all units consumed, (2) Satisfaction from the last unit consumed, (3) The price paid for a good, (4) The cost of production.
Which of the following is a limitation of the Law of Diminishing Marginal Utility? (1) Applies to all goods, (2) Assumes rational behaviour, (3) Does not apply to addictive goods, (4) Utility is always positive.
Which of the following is an example of the Law of Diminishing Marginal Utility? (1) The more you eat, the hungrier you get, (2) The more you eat, the less satisfaction you get from each additional bite, (3) The more you eat, the more you want, (4) The more you eat, the more expensive food becomes.
Fill in the blank: According to the ordinal utility approach, utility can be _______ but not measured.
Fill in the blank: The concept of utility helps to explain the _______ effect in consumer demand.
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 assumption that all units consumed are _______.
A consumer spends Rs. 10 on good X and Rs. 20 on good Y. The marginal utility of X is 40 utils and of Y is 60 utils. According to the law of equi-marginal utility, should the consumer reallocate expenditure?
State whether the following statement is true or false: The Law of Diminishing Marginal Utility is the basis for the law of demand.
State whether the following statement is true or false: Utility can be measured in cardinal numbers according to the cardinal utility approach.
State whether the following statement is true or false: Utility is always equal to satisfaction.
