Understanding Utility Concepts

What is the definition of Total Utility?

• Total Utility is the total satisfaction received from consuming a quantity of goods or services.

• Total Utility is the total cost of goods or services consumed.

• Total Utility is the total amount of money spent on goods or services.

• Total Utility refers to the average satisfaction per unit consumed.

Which of the following best describes Marginal Utility?

• The total satisfaction from all units consumed.

• The additional satisfaction gained from consuming one more unit of a good.

• The price of a good in relation to its demand.

• The decrease in satisfaction from consuming less of a good.

What does the Law of Diminishing Marginal Utility state?

• The law applies only to luxury goods and not necessities.

• As consumption increases, the marginal utility of each additional unit decreases.

• Marginal utility increases with each additional unit consumed.

• As consumption increases, total utility remains constant.

If a consumer's Total Utility increases with each additional unit consumed, what can be said about Marginal Utility?

• Marginal Utility is positive.

• Marginal Utility is zero.

• Marginal Utility is negative.

• Marginal Utility decreases with each unit consumed.

What happens to Marginal Utility as more units of a good are consumed according to the Law of Diminishing Marginal Utility?

• Marginal Utility increases as more units of a good are consumed.

• Marginal Utility fluctuates randomly with consumption.

• Marginal Utility remains constant regardless of consumption.

• Marginal Utility decreases as more units of a good are consumed.

Which of the following is an example of Total Utility?

• The total satisfaction from consuming three slices of pizza.

• The calories in a slice of pizza.

• The enjoyment of watching a movie.

• The cost of three slices of pizza.

How can Total Utility be calculated?

• Total Utility = Sum of utility from each unit consumed

• Total Utility = Difference between total cost and total revenue

• Total Utility = Maximum utility from a single unit

• Total Utility = Average utility per unit consumed

If a consumer experiences a decrease in Marginal Utility, what does this imply about their consumption behavior?

• The consumer will likely reduce their consumption of the good.

• The consumer will switch to a different good entirely.

• The consumer will increase their consumption of the good.

• The consumer will maintain the same level of consumption.

How does a consumer maximize their Total Utility?

• By spending all income on the most expensive good.

• By purchasing only one type of good to avoid complexity.

• By ignoring the prices of goods when making purchases.

• By equalizing the marginal utility per dollar spent across all goods.

What is the law of diminishing marginal utility?

• As consumption increases, the additional satisfaction from each extra unit decreases.

• Marginal utility increases with each additional unit consumed.

• The law states that utility remains constant regardless of consumption.

• As consumption increases, total satisfaction always increases.