Consumer Behavior Quiz

What does utility measure?

• The price of a good

• The satisfaction derived from consuming a good

• The weight of a product

• The production cost of a good

What is a key difference between cardinal and ordinal utility?

• Cardinal utility is qualitative; ordinal utility is quantitative

• Ordinal utility uses numerical measurement; cardinal utility uses ranking

• Cardinal utility is quantitative; ordinal utility is qualitative

• Both are qualitative measures

How is marginal utility (MU) calculated?

• Total utility divided by price

• Δ Total utility / Δ Quantity

• Quantity divided by total utility

• Total utility times quantity

What happens to marginal utility as consumption increases, according to the law of diminishing marginal utility?

• It remains constant

• It increases

• It decreases

• It doubles

At consumer equilibrium, which condition is satisfied?

• MUx / Px > MUy / Py

• MUx / Px = MUy / Py

• MUx = MUy

• Px = Py

What does the slope of a budget line represent?

• Income level

• Opportunity cost

• Total utility

• Fixed cost

What happens to a budget line when the price of one good decreases?

• Shifts inward

• Shifts outward

• Rotates outward

• Rotates inward

Which of the following is true about indifference curves?

• They intersect each other

• They are upward sloping

• They are convex to the origin

• They represent negative utility

What does the theory of consumer choice examine?

• How to increase production efficiency

• How individuals make rational decisions with limited resources

• The relationship between cost and revenue

• Strategies for business growth

Which of the following is NOT a characteristic of utility?

• It is subjective

• It varies among individuals

• It is always measurable in numbers

• It measures satisfaction from goods or services