Demand and Marginal Utility

Definition of Marginal Utility

• the satisfaction from consumption

• to total satisfaction from consuming a product

• the extra satisfaction from the last unit consumed

• the extra consumption from last unit consumed

The definition of the law of diminishing marginal utility

• As more units are consumed the marginal utility falls.

• As more units are consumed the marginal utility increases.

• As price decreases quantity demanded increases.

• As price increases consumers are willing to pay more.

The total utility definition states:

• The usefulness, benefit or satisfaction a consumer gains from consuming a product.

• The satisfaction gained from consuming a quantity of an economic good, measured in utils.

• The added consumer satisfaction from consuming a quantity of a good.

• The consumer's satisfaction from consuming a quantity of a good.

Total Utility will be greatest when marginal utility equals

• 0

• 1

• 2

• 3

Consumer equilibrium occurs when ...

• they have spent all of their income.

• a person consumes quantities of three goods.

• a person consumes quantities of two goods.

• satisfaction is maximised for a given level of income.

The law of demand assumes ceteris paribus which means ...

• factors such as price remains unchanged.

• all other factors remain unchanged.

• that the only factor to change is the consumer's income.

• all of the above.

The relationship between demand and marginal utility is best explained as ...

• the marginal utility a person gets from consuming a good determines their demand for the good.

• the total utility a person gets from consuming a good determines their demand for the good.

• the marginal utility a person gets from consuming a good determines their market demand for the good.

• the total utility a person gets from consuming a good determines their market demand for the good.

Harry Munkee loves eating bananas. His total utility for for 3 bananas is ?

• 70

• 71

• 72

• 73

Harry's marginal utility for 2 bananas is ?

• 23

• 32

• 25

• 26

Total utility is the benefit received from consuming an extra unit of a good.

• TRUE

• FALSE