Consumer Awareness and Utility Law Quiz
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Questions and Answers

What are units called when the marginal utility is greater than the price?

  • Marginal units
  • Extramarginal units
  • Maximum utility units
  • Intramarginal units (correct)
  • What term is used for the unit at which the marginal utility becomes equal to the market price?

  • Maximum utility unit
  • Intramarginal unit
  • Marginal unit (correct)
  • Extramarginal unit
  • Why is the Union Budget considered important?

  • It determines the maximum price of consumer goods
  • It affects production, income distribution, and resource utilization (correct)
  • It defines the maximum utility of consumer goods
  • It has a direct impact on inflation rates
  • What happens to the marginal utility as the consumer consumes further units of x?

    <p>It decreases at a diminishing rate</p> Signup and view all the answers

    At what point does the total utility start to decline and the marginal utility becomes negative?

    <p>Point of satiety</p> Signup and view all the answers

    What is the implication of consumption beyond the point of satiety?

    <p>It transforms satisfaction into dissatisfaction</p> Signup and view all the answers

    What does the law of diminishing marginal utility assume about the commodity consumed?

    <p>It assumes all units of the commodity are consumed in quick succession without any lapse of time.</p> Signup and view all the answers

    What does the law of diminishing marginal utility assume about the utility derived from each unit of a commodity?

    <p>It can be cardinally or numerically measured.</p> Signup and view all the answers

    What aspect of the commodity consumed does the law of diminishing marginal utility assume to be of reasonable size?

    <p>The size of all units consumed, neither too big nor too small</p> Signup and view all the answers

    What characteristic does the law of diminishing marginal utility assume about all related factors like income, tastes, habits, choices, likes, and dislikes of a consumer?

    <p>They remain constant</p> Signup and view all the answers

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