1. Diminishing marginal utility A. is the combination of goods and services that
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Question
1. Diminishing marginal utility
A. is the combination of goods and services that maximizes utility for a given income.
B. is the additional satisfaction derived from consuming one more unit of a good or service.
C. occurs when there is a change in purchasing power as a result of a change in the price of a good.
D. occurs when a consumer buys more of a good as a result of a relative price change.
E. occurs when the additional utility for each good declines as consumption increases.
A. the real-income effect.
B. diminishing marginal utility.
C. the substitution effect.
D. the consumer optimum
E. marginal utility.
3.
A. the substitution effect.
B. real income effect
C. consumer optimum
D. marginal utility
E. diminishing marginal utility
4.
A. all products produce same level of utility.
B. Everyone receives different levels of satisfaction from the same good or service.
C. Economists measure utility will a unit they refer to as an utte.
D. Everyone receives the same level of satisfaction from the same good or service.
E.Utility is easy to measure across individuals
5.
A. occurs when a consumer buys more of a good as a result of a relative price change.
B. the combo of goods and services that maximizes utility for given income
C. is the additional satisfaction derived from consuming one more unit of a good or service.
D. occurs when there is a change in purchasing power as a result of a change in the price of a good.
E. occurs when utility declines as consumption increases.
6.
A. MU chinese> MU indian
B. U Chinese = U Indian
C. MU Chinese = MU Indian
D. MU Chinese < MU Indian
E. U Chinese > U Indian
7.
A. 7 strawberries, 7 apples
B. 4 strawberries, 6 apples
C. 6 strawberries, 5 apples
D. 4 starwberries, 2 apples
E. 2 strawberries, 7 apples
8. To reach the consumer optimum for two goods, the:
A. ratio of total utility to price for both good must be equal.
B. price of both goods must be equal.
C. ratio of marginal utility to price for both good must be equal.
D. marginal utility for both goods must be equal.
E. total utility for both goods must be equal.
2. In July 2012, it cost $125 to purchase a ticket to visit the parks at Disneyland for one day. A five-day pass to the same parks cost only $290. Disneyland charges less for additional days because of:Explanation / Answer
Diminishing marginal utility occurs when the additional utility for each good declines as consumption increases. In July 2012, it cost $125 to purchase a ticket to visit the parks at Disneyland for one day. A five-day pass to the same parks cost only $290. Disneyland charges less for additional days because of diminishing marginal utility. As per the law of diminishing marginal utility addtitional unit will give lower satisfaction and the consumer will buy only if the price is lowered. The additional satisfaction derived from consuming one more unit of a good or service is called marginal utility Everyone receives different levels of satisfaction from the same good or service.
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