Consumer's equilibrium (cardinal utility approach)

The approach where utility can be measured in terms of rupee is known as

• Ordinal utility approach

• Cardinal utility approach

Total utility is constant when marginal utility is____________

• Maximum

• zero

• negative

• none of these

The formula for calculating marginal utility is_____________

• TUn-TUn-1

• TUn+TUn-1

• MU1=MU2=MU3

• MU1+MU2+MU3+......+MUn

Which of the shaded area in the diagrams below represents total utility?

• 
• 
• 
• 

Which of the following can be referred to as 'point of satiety'?

• MU is negative

• TU is rising

• MU is zero

• TU is falling

A consumer is consuming two goods X and Y and is in equilibrium. The prices of X and Y are Rs10 and Rs 20 respectively and MU of good Y is 50 units. What will be MU of good X?

• 100 units

• 25 units

• 250 units

• 4 units

After reaching the point of satiety, consumption of additional units of the commodity causes:

• TU falls and MU increases

• Both TU and MU increases

• TU falls and MU falls and become negative

• TU becomes negative and MU falls

A consumer consumes only two goods X and Y whose prices are Rs 3 and Rs 4 respectively. If the consumer chooses a combination of the two goods with MU of X equal to 4 and that of Y equal of 3, then the consumer will______

• Buy more units of both X and Y

• Buy more units of Y and less of X

• Buy more units of X and less of Y

• Buy less units of the both, X and Y

When marginal utility is zero, total utility is

• zero

• minimum

• maximum

• negative

Which of the following is Gossen's first law

• Law of substitution

• Law of Equi-marginal utility

• Law of Diminishing Marginal utility

• None of the above