Quiz on Utility Definition and Concept

What is utility in economics?

• A measure of the production of goods

• A measure of the quantity of goods consumed

• A measure of the price of goods

• A measure of satisfaction from consuming goods

What is the basis of the utility function?

• The satisfaction of the consumer

• The quantity of goods consumed

• The price of goods

• The production of goods

What is a characteristic of utility according to the text?

• Independent of knowledge

• Objective

• Measurable

• Dependent upon human needs

How is utility measured in the Cardinal Approach?

• In subjective terms

• In cardinal numbers

• In ranking

• In qualitative terms

What is a limitation of the Cardinal Approach in measuring utility?

• Cannot compare different goods

• Cannot always measure utility

• Does not analyze price changes

• Does not consider consumer preferences

How is utility measured in the Ordinal Approach?

• In cardinal numbers

• In qualitative terms

• In ranking

• In subjective terms

What is a limitation of the Ordinal Approach in measuring utility?

• Assumes only two goods

• Assigns numerical values easily

• Always possible to compare goods

• Considers all consumer choices

What does the Ordinal Approach assume about consumer choices?

• Quantitative and transitive

• Subjective and inconsistent

• Transitive and consistent

• Objective and consistent

What does the utility function measure?

• How much one saves in a bank

• How much one enjoys a movie

• How much one invests in stocks

• How much one earns from work

What is the utility of a good according to the text?

• Is equated with usefulness

• Is always measurable

• Remains constant for all consumers

• Differs from one consumer to another