Economics: Marginal Utility Concepts
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Questions and Answers

What does 'marginal utility' refer to?

  • The total satisfaction gained from consuming a good or service
  • The average satisfaction gained from consuming a good or service
  • The satisfaction gained from the first unit of a good or service
  • The additional satisfaction gained from consuming one more unit of a good or service (correct)
  • In economics, what is the primary concept behind marginal utility?

  • Market equilibrium and competition
  • Consumer preferences and decision-making (correct)
  • Producer costs and revenue
  • Government regulation and taxation
  • How does marginal utility change as more units of a good or service are consumed?

  • It increases, reflecting increasing marginal utility
  • It decreases, reflecting diminishing marginal utility (correct)
  • It becomes negative, reflecting negative marginal utility
  • It remains constant, reflecting constant marginal utility
  • What impact does the concept of marginal utility have on pricing strategies?

    <p>It provides insight into how consumers perceive the value of additional units</p> Signup and view all the answers

    What is the primary focus of consumer behaviour?

    <p>The study of how individuals make decisions about the allocation of resources</p> Signup and view all the answers

    How does marginal utility impact consumer decision-making?

    <p>It helps in determining the additional satisfaction gained from consuming one more unit of a good or service</p> Signup and view all the answers

    How does marginal utility change as more units of a good or service are consumed?

    <p>It generally decreases, indicating diminishing marginal returns</p> Signup and view all the answers

    What do economists primarily consider when analyzing consumer decisions?

    <p>The trade-offs consumers make due to scarcity of resources</p> Signup and view all the answers

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