WorksheetsUtility
Total questions: 9
Worksheet time: 34mins
Give the economics term.
1. The sum of the utilities derived from the consumption of all the units of a commodity.
(a)
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 (a) .
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]
Study the following passage and answer the questions:
In economics, a commodity possesses utility Irrespective of it being good or bad. Thus, in economics, both milk and poison possess utility. Utility never takes into account the concepts such as good and bad or moral and immoral. etc. Therefore, utility is ethically neutral.
Utility is the feeling of a consumer towards a particular commodity. Utility does not have physical existence. It is abstract in nature. Therefore, utility is a psychological concept.
Utility depends upon the intensity of want. When an individual consumes the first unit of commodity he finds the maximum utility from it. But at the time of consumption of second unit of the same commodity, the intensity of want decreases. Therefore, the individual finds the further units of consumption less important. Therefore, marginal utility diminishes with the increase in the stock.
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]
