Utility

Give the economics term.

1. 1. The sum of the utilities derived from the consumption of all the units of a commodity.

2. 2. In the Law of Diminishing Marginal utility, Alfred Marshall assumes that marginal utility of money_____

• increase

• rises and then falls

• decreases

• remains constant

When MU is negative, TU is______.

As per the Law of Diminishing Marginal Utility, measurement of utility is assumed to be

• ordinal

• cardinal

• both ordinal & cardinal

• none of the above

Identify and explain the concepts from the given illustration :

Jimin purchased a sweater for his friend in the winter season.

Explain the type of utility. [ any 3]

1) Explain the concept of utility with reference to its ethical neutrality.

(2) Explain the reasons for diminishing nature of utility.

a] When total utility is maximum marginal utility is____

b] When total utility falls, marginal utility become ____

[2marks]

Explain the features/characteristics of utility. [Any 4]