Chapter 2 Utility Analysis

Utility is the cause of consumption, ______ is the end result of consumption.

• satisfaction

• disutility

• dissatisfaction

• total utility

In the law of diminishing marginal utility, Alfred Marshall assumes that marginal utility of money _______

• increases

• remains constant

• decreases

• raises and then falls

As per the law of diminishing marginal utility, measurement of utility is assumed to be_______

• ordinal

• cardinal

• both ordinal and cardinal

• none of the above

MU of the commodity becomes negative when TU of a commodity is _______

• rising

• constant

• falling

• zero

Point of satiety means_____

• TU is rising and MU is falling

• TU is maximum and MU is zero

• TU is falling and MU is negative

• MU is falling and TU is rising

Larger the stock of commodity, ______is the MU

• greater

• lesser

• equal

• larger

Larger the stock of commodity, _______is the TU.

• smaller

• lesser

• equal

• larger

The law of diminishing marginal utility forms the basis of law of ______

• supply

• demand

• government

• one price

A rational consumer attains equilibrium where_____

• MU_x > P_x

• MU_x = P_x

• MU_x < P_x

• MU_x = 0

A dentist giving dental treatment to a patient is an example of

• time utility

• possession utility

• service utility

• place utility