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WorksheetsDiminishing Marginal Utility
Total questions: 30
Worksheet time: 15mins
Emma Eba marginal utility for 2 bananas is ?
23
32
25
26
Emma Eba loves eating bananas. His total utility for for 3 bananas is ?
70
71
72
73
The relationship between demand and marginal utility is best explained as ...
the marginal utility a person gets from consuming a good determines their demand for the good.
the total utility a person gets from consuming a good determines their demand for the good.
the marginal utility a person gets from consuming a good determines their market demand for the good.
the total utility a person gets from consuming a good determines their market demand for the good.
The law of demand assumes ceteris paribus which means ...
factors such as price remains unchanged.
all other factors remain unchanged.
that the only factor to change is the consumer's income.
all of the above.
Consumer equilibrium occurs when ...
they have spent all of their income.
a person consumes quantities of three goods.
a person consumes quantities of two goods.
satisfaction is maximised for a given level of income.
Total Utility will be greatest when marginal utility equals
0
1
2
3
The total utility definition states:
The usefulness, benefit or satisfaction a consumer gains from consuming a product.
The satisfaction gained from consuming a quantity of an economic good, measured in utils.
The added consumer satisfaction from consuming a quantity of a good.
The consumer's satisfaction from consuming a quantity of a good.
Negative marginal utility means that
total utility is also negative
marginal utility is increasing
the price of the product is increasing as additional units are consumed
total utility is decreasing as additional units are consumed
When marginal utility is decreasing but positive, total utility is:
increasing at a decreasing rate.
decreasing at a decreasing rate
increasing at an increasing rate.
decreasing at an increasing rate.
Children who refuse to eat Bread and butter at dinner are making the statement that the marginal utility of Bread and butter is:
zero
negative
positive, but decreasing.
less than the total utility
Which situation is consistent with the law of diminishing marginal utility?
The more pizza Henry eats, the more he enjoys another slice.
The more pizza Henry eats, the less he enjoys another slice
Henry's marginal utility from eating pizza becomes positive after eating three
slices.
Henry's marginal utility from eating pizza reaches a maximum when total utility
is zero.
How do we calculate marginal utility?
TU: Total Utility
Q: Quantity consumed
∆TU/∆Q
∆MU/∆Q
∆Q/∆TU
∆Q/∆MU
The basic hypothesis of utility theory states that as more of a commodity is consumed during a given period of time,
total utility and marginal utility will both decrease
total utility and marginal utility will both increase
total utility will increase but marginal utility will eventually decrease
Total utility can be measured as
the sum of all marginal utilities
the sum of all average utilities
the total revenue spent on goods and services
the price of a product
Marginal utility is the
overall satisfaction from consuming a good
additional satisfaction from consuming one more unit of a good
average satisfaction from consuming a good
the change in satisfaction from consuming 1% more of a good
A word that can be substituted for utility is
cost
price
satisfaction
income
What is the Law of Diminishing Marginal Returns?
The Law of Diminishing Marginal Returns states that as additional units of a variable input are added to fixed inputs, at some point the marginal product of the variable input will decrease.
The Law of Constant Marginal Returns states that as additional units of a variable input are added to fixed inputs, the marginal product of the variable input will remain constant.
The Law of Increasing Marginal Returns states that as additional units of a variable input are added to fixed inputs, the marginal product of the variable input will increase.
The Law of Marginal Returns states that as additional units of a variable input are added to fixed inputs, the marginal product of the variable input will always increase.
according to the law of diminishing marginal utility, satisfaction derived from consumption of each additional unit:
increases
decreases
remains same
either increases or decreases
Weapons are more useful during the time of war.
form utility
place utility
knowledge utility
time utility
A flour mill making flour from wheat.
form utility
place utility
knowledge utility
time utility
A farmer selling rice stored in the warehouse at the end of session is example of
time utility
possession utility
service utility
place utility
A mountaineer using oxygen cylinder at a high altitude is an example of
time utility
possession utility
service utility
place utility
A dentist giving dental treatment to a patient is an example of
time utility
possession utility
service utility
place utility
A rational consumer attains equilibrium where_____
MUx > Px
MUx = Px
MUx < Px
MUx = 0
The law of diminishing marginal utility forms the basis of law of ______
supply
demand
government
one price
Larger the stock of commodity, _______is the TU.
smaller
lesser
equal
larger
Larger the stock of commodity, ______is the MU
greater
lesser
equal
larger
Point of satiety means_____
TU is rising and MU is falling
TU is maximum and MU is zero
TU is falling and MU is negative
MU is falling and TU is rising
MU of the commodity becomes negative when TU of a commodity is _______
rising
constant
falling
zero
Utility is the cause of consumption, ______ is the end result of consumption.
satisfaction
disutility
dissatisfaction
total utility
