Marginal Utility and Marginal Cost

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.

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.

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

• TRUE

• FALSE

If Ann gets 100 units of utility from reading a book and 500 units of utility from playing with her cat, What can we determine about Ann?

• She does not enjoy reading books.

• She does not enjoy playing with her cat.

• She prefers reading a book to playing with her cat.

• She prefers playing with her cat to reading a book.

Which of the following best refers to the additional cost a person or firm incur to produce one more unit?

• Consumer Benefit

• Intersection

• Marginal Benefit

• Marginal Cost

The first four dinner rolls Joan consumes have total utility of 15, 27, 37, and 45 respectively. What is the marginal utility of the 4th dinner roll?

• 124 units of utility

• 45 units of utility

• 11.25 units of utility

• 8 units of utility

What best reflects the goal of a consumer?

• To acquire the largest possible quantity of goods.

• To acquire the largest possible variety of goods.

• To maximize utility.

• To save money.

You made a good decision if:

• Marginal cost is greater then marginal benefit

• Marginal cost is less than marginal benefit

• Marginal benefit is greater then marginal cost

• Marginal benefit is less then marginal cost