12 Questions
According to the law of diminishing marginal utility, what happens to the marginal utility as the consumer consumes more units of a commodity?
It decreases.
How is the law of diminishing marginal utility represented graphically in Figure 1.3?
As a downward-sloping curve.
Which of the following is NOT an assumption for the application of the law of diminishing marginal utility?
Consumption of different qualities of a commodity.
Under what condition does the law of diminishing marginal utility operate according to the text?
No change in consumer's taste and preference.
In Figure 1.4, what does the downward trend in marginal utility of orange juice imply?
Decreased enjoyment per unit consumed.
Which of the following is NOT a condition for the application of the law of diminishing marginal utility?
Fluctuating consumption pattern.
What is the primary focus of utility analysis?
Understanding consumer behavior and market purchases based on satisfaction
Which of the following statements about utility is true?
Utility is subjective and varies with respect to time, place, and person
What is the relationship between utility and morality?
Utility has nothing to do with morality
Which of the following is a fundamental concept for marginal utility analysis?
Total utility and marginal utility
What does total utility (TU) represent?
The total amount of satisfaction derived from consuming a specific quantity of a commodity
How is marginal utility (MU) defined?
The additional utility derived from consuming one additional unit of a commodity
Test your knowledge on utility analysis which provides insights into understanding consumer behaviour and market purchase. Learn about measurement of utility, marginal utility analysis, and indifference curve analysis.
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